The Real Winners of the 2022 World Series of Poker

Yesterday afternoon, the 2022 Main Event of the World Series of Poker concluded. First, congratulations to Caesars for putting on a mostly great series at the Paris and Bally’s casinos on the Strip. This was the first year the events ran on the Strip (previously, they were held at the Rio Casino about one mile west of the Strip), and the events attracted near-record crowds.

This year, the Main Event had 8,663 entrants, each ponying up $10,000. The prize pool was $80,782,475 (the difference is the funds kept by Caesars for running the event). We focus on the final table of ten, but 1,300 of the 8,663 received winnings from the prize pool; a minimum cash was worth $15,000. The winner received a whopping $10 million…but that’s before taxes.

One important note: I do need to point out that many of the players in the tournament were “backed.” Poker tournaments have a high variance (luck factor). Thus, many tournament players sell portions of their action to investors to lower their risk (and/or “swap” action with other entrants). It is quite likely that most (if not all) of the winners were backed (or had swaps) and will, in the end, only enjoy a portion of their winnings. I ignore backing and swaps in this analysis (because the full details are rarely publicized). Now, on to the winners.

Congratulations to Epsen Uhlen Jorstad, a professional poker player and a native of Norway now residing in London. On the final hand, Mr. Jorstad flopped three of a kind (holding Q-2 in his hand, with the flop being 4-2-2). Adrian Attenborough, the second place finisher, flopped top pair (holding J-4); in heads-up play, any pair is usually a good hand. This was definitely not the case this time, with the 8 on the turn changing nothing. The river Queen gave Mr. Jorstad a full house, and when Mr. Attenborough called Mr. Jorstad’s river all-in bet, we had a winner. Mr. Jorstad is a popular poker streamer on Twitch, and he’s also an instructor at the Run It Once poker training site. Mr. Jorstad’s first place prize of $10 million will be his—just his—to enjoy. Had he still resided in Norway, he’d be looking at 39% vanishing in taxes. However, as a resident of the United Kingdom he benefits first from the tax treaty between the United States and the United Kingdom; gambling winnings are exempt. He also benefits from how gambling is taxed in the United Kingdom, or rather, how it’s not taxed. Yes, the U.K. doesn’t tax gambling.

In second place was the aforementioned Mr. Attenborough. A native of Australia, Mr. Attenborough, now resides here in Las Vegas. A professional poker player, Mr. Attenborough will owe US income tax and self-employment tax. Of his $6 million in winnings, I estimate he’ll have to fork over $2,388,875 to the IRS; his actual winnings after taxes are an estimated $3,611,125. State income taxes are a non-issue for Mr. Attenborough: Nevada doesn’t have a state income tax.

In third place was Michael Duek winning $4 million. Mr. Duek resides in Fort Lauderdale, Florida but is a native of Argentina. Mr. Duek, a professional poker player who focuses on pot-limit Omaha, decided to enter the Main Event (the event plays no-limit hold’em). It was an excellent decision, and of his $4 million third-place prize he’ll end up paying an estimated $1,593,064 in tax to the IRS (like Nevada, Florida doesn’t have state income tax) and keep $2,406,936 of his winnings.

John Eames, of Southport in the United Kingdom, finished fourth for $3 million. Mr. Eames is another professional poker player who benefits from the US-UK tax treaty and the United Kingdom’s 0% rate of taxation on gambling. Yes, Mr. Eames gets to keep all of his $3 million.

Finishing in fifth place for $2,250,000 was Matija Dobric of Slatina, Croatia. Mr. Dobric, a professional poker player who mostly plays online, finished 32nd in the 2021 Main Event and bested that this year. The United States and Croatia have just completed negotiating a tax treaty, but it’s definitely not in place today. That means that 30% of Mr. Dobric’s winnings ($675,000) will be withheld and remitted to the IRS. Croatia does tax gambling, but with a maximum tax rate of 30% it is likely that Mr. Dobric won’t owe anything to Croatia: he should be able to take a tax credit on his Croatian tax return to avoid double-taxation of his income. Thus, he should be able to enjoy his $1,575,000 of after-tax winnings.

The sixth place finisher was the first of two amateur poker players at the final table. Jeffrey Farnes, of Dallas, Oregon (near Oregon’s state capital of Salem) ended in sixth place for $1,750,000. As a non-professional poker player, he avoids self-employment tax. However, as a resident of Oregon he owes state income tax on his worldwide income. I estimate he’ll only get to keep $950,312 of his winnings, with $621,968 going to the IRS and $177,720 to the Oregon Department of Revenue.

The other amateur gambler, Aaron Duczak of Kamloops, Canada (in British Columbia) finished in seventh place for $1,350,000. The US-Canada Tax Treaty specifies that Canadians face 30% withholding on their gambling winnings but can get some of this back based on gambling losses. It appears that based on the recent Tax Court of Canada decision in Duhamel c. La Reine that some professional gamblers in Canada will owe Canadian income tax. (Mr. Duhamel, who won the 2010 Main Event, was held to be an amateur gambler in that decision (decision in French); however, it’s clear from the decision that Quebec law would allow for taxation of some professional poker players.) But Mr. Duczak isn’t a professional gambler, so the only tax he’ll owe is the $405,000 withheld to the IRS (he’ll keep the other $945,000).

In eighth place was Phillipe Souki of London. The French professional also moved to the United Kingdom to avoid French taxation. His eighth place finish was worth $1,075,000 and he gets to keep all of it. Had he stayed in France, he’d owe an estimated 47.5% in tax. That’s about 510,000 reasons to be in London rather than Paris.

The ninth place finisher was Matthew Su. A professional poker player residing in Washington, DC, he didn’t have much luck at the final table when his pair of Queens lost to an opponent’s pair of nines. Finishing ninth earned Mr. Su $850,675. That’s before taxes, and Mr. Su will owe an estimated 47.70% of his winnings to tax: $332,898 to the IRS and $72,856 to the District of Columbia’s Office of Tax and Revenue (leaving Mr. Su with just $444,921).

This year, ten players made the final table rather than the usual nine. Day 7 of the Main Event ran so long that the WSOP stopped play with ten left. Finishing tenth was Asher Conniff of Brooklyn, New York. Mr. Conniff’s final table appearance did not last long. On one of the first hands, he went all-in with a pair of tens versus his opponent’s Ace-King. That’s a classic “flip” (a nearly 50% chance for either player to win), but after the flop of three Kings Mr. Conniff was “drawing dead” (he could not win the hand). A professional poker player, Mr. Conniff’s winnings of $675,000 face the highest marginal tax rate of any of the final ten players: 48.21%. I estimate that Mr. Conniff will only keep $349,598 of his winnings, with $253,733 going to the IRS and $71,669 headed to the New York Department of Taxation and Finance.

Here’s a table summarizing the tax bite:

Amount won at Final Table $30,950,675
Tax to IRS $6,270,538
Tax to Oregon Department of Revenue $177,720
Tax to D.C. Office of Tax and Revenue $72,856
Tax to New York Dept. of Taxation and Finance $71,669
Total Tax $5,512,783

That means 17.81% of the winnings at the final table goes toward taxes.

Here’s a second table with the winners sorted by their estimated take-home winnings:

Winner Before-Tax Prize After-Tax Prize
1. Epsen Jorstad $10,000,000 $10,000,000
2. Adrian Attenborough $6,000,000 $3,611,125
4. John Eames $3,000,000 $3,000,000
3. Michael Duek $4,000,000 $2,406,936
5. Matija Dobric $2,250,000 $1,575,000
8. Phillipe Souki $1,075,000 $1,075,000
6. Jeffrey Farnes $1,750,000 $950,312
7. Aaron Duczak $1,350,000 $945,000
9. Matthew Su $850,675 $444,921
10. Asher Conniff $675,000 $349,598
Totals $30,950,675 $24,357,892

Once Again, players residing in the United Kingdom ended up finishing higher than their actual results (based on after-tax winnings). Both Mr. Eames and Mr. Souki get to enjoy more of their winnings based on the favorable tax regime of Britain. Someone recently asked me why don’t American poker professionals all move to the UK? Ignoring immigration law, the problem is that Americans pay tax on their worldwide income even if they reside outside the United States (subject to tax treaties and the foreign tax credit to avoid double taxation). An American residing in the U.K. would still owe tax to the IRS on their gambling winnings.

The Internal Revenue Service did not end up with taxes that exceeded the first place winnings; the agency will have to be content with finishing in third place (based on pre-tax prizes). With three winners exempt from US taxation, the IRS didn’t rack in its usual haul. Tax agencies are left with “only” $5.5 million of the nearly $31 million awarded at the final table. Still, you can’t say that the IRS didn’t do poorly because the house always wins.

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