Here’s Part Two of an article on poker and taxation from the team at bet365 poker. In Part One they covered Paying tax on Poker Winnings for Americans and Canadians.

Poker Winnings and Taxes Part II: International Players
Disclaimer: The following is for informational purposes only. A tax professional should be consulted for official advice.

With the top two WSOP Main Event winners were from Denmark and Russia there have been a lot of discussions about how taxation works for international poker players who win big in an American poker tournament.

Although taxes are always a messy topic since so much is dependent on each individual’s situation, we have undertaken to shed a little light on the topic of poker winnings and taxes for international players.

Countries with Tax Treaties

The international poker community is broken into two groups in the eyes of the IRS. The first are those with which the United States has a Tax Treaty. This list includes: Austria, Czech Republic, Denmark, Finland, France, Germany, Hungary, Ireland, Italy, Japan, Latvia, Lithuania, Luxembourg, Netherlands, Russian Federation, Slovak Republic, Slovenia, South Africa, Spain, Sweden, Tunisia, Turkey, Ukraine, and the United Kingdom.

If you are a resident of any of these countries then you get to avoid the 30% withholding tax but will still be subject to your own country’s taxation. In order to prevent the cash cage from keeping 30% on behalf of the U.S. government residents of the above countries you will need to fill out and hand in the IRS form W-8BEN and that will also require a valid Individual Taxpayer Identification Number (ITIN number).

To get an ITIN you will first have to need one, which means that you can’t apply for it until you actually have a tax return to claim by winning something. So if you cash in an American poker tournament like the WSOP, you can apply for an ITIN in January of the following year. Then, once you have the ITIN, you can apply to get your 30% back from the Rio Hotel and Casino.

Find out more about the ITIN and how to apply for it at the IRS website.

Countries without Tax Treaties

This is a tough place to be. A poker player from somewhere like Kazakhstan will not only be subject to the United States’ 30% withholding tax, but also to the taxes of Kazakhstan itself (whatever those might be). The good news is that many countries will compensate the poker player with a credit for the 30%.

The Best and the Worst Places to Live

Based on the payouts from the 2008 WSOP Final Table, two countries pop out as being on either end of the poker taxation spectrum and they come from the top two finishers.

Peter Eastgate of Denmark who won $9.1 million will be subjected to a mind boggling 45% hit on his first $4 million and 75% on the rest of his winnings. This leaves him with around $2.5 million, even less than what second place Ivan Demidov will end up keeping. Demidov of Russia won $5,809,595 and will only be taxed 13% which means he’ll end up keeping $5,809,595 — $755,247 Russian tax (13.0% rate) $5,054,348!

Eastgate allegedly tried to become a resident of the United Kingdom during the months leading up to the final table so as to avoid Denmark’s brutal taxes, but experts have said that this is not likely to be accepted by the Danish government as a way to avoid the tax.

Not ready to talk taxes yet? Play online poker at bet365.

For more information on this popular online poker room check out the latest bet365 poker review by the team at GoonersGuide.com.

Here’s some recent poker quotes from well known professional players:

Justin Bonomo
I know the “feel” players will cringe at this statement, but every situation in poker can be broken down into mathematical terms.

It may seem like you have many good options in a given situation, but there is always one correct play, and the rest are all mistakes.

Antonio Esfandiari
I got the owner to agree to flip for our bill. Double or nothing. If we lose we pay double whatever the bill was (about $900 pre tip) and if we win it was on the house. Heads or tails 2 out of 3. We win – our entire meal was free. How sweet it is.
[Eds comment: Why would you take this bet? Hell, I’d never even serve him. Tosser.]

Evelyn Ng
I used to sometimes refer to A-Q affectionately as “big chick” or “slick chick” as a joke, but you know, sometimes A-Q is just a bitch! [Evelyn was 3 times screwed with A-Q in the 08 Ladies NO Limit Hold’em World Championship].

Erick Lindgren
Betting on myself to win a bracelet was a way to make it more important. This year, it became about attaining the bracelet, and not just the money, because money doesn’t motivate me as much as a tangible object. I see why Hellmuth talks about them all the time – it helps his motivation.

TOP POKER ROOMS FOR USA RESIDENTS – Safe, reputable poker rooms that welcome Amercian players

If it looks like a dog, barks like a dog and even has the same registration tag, then perhaps you’d best not throw it a bone!

News this week of poker scandal-specialists, Absolute Poker and Ultimate Bet a.k.a. Tokwiro Enterprises, “joining” to form the Cereus Poker Network was fairly predictable.

Applying a thick coat of “rebranding” to dodge a bullet is consistent with behaviours to date from this online gambling outfit. The head of Tokwiro Enterprises, a former Grand Chief of the Mohawk nation who was apparently instrumental in establishing the Kahnawake Gaming Commission, thought no further action was coming his way… and so a little rebranding would “do the trick”…. but watch this space!

Some background: In late May an independent investigation identified 18 super-user accounts involved in poker fraud at the Tokwiro Enterprises poker sites. Since then, however, posts on many poker forums allege that the cheating was in fact more widespread than reported. This apparently led to Ultimate Bet issuing a statement confirming “additional suspect accounts” and a longer timeline of cheating. A link has been claimed between the cheating incidents and Russ Hamilton, a former owner of Ultimate Bet.

Here’s an extract of what online gambling authority GamblingIntelligenceGroup.com had to say today (below) – you decide whether you’ll play online at the new Cereus Poker Network – we won’t be!

If you’re after a safe, fair online poker site with high integrity then check out these detailed poker reviews. We play-test all sites we review and members of our test team are regular players at all sites we recommend!

Good luck at the tables, and don’t feed that (poker) dog!
Kishan Neilsen

“Mired in controversy and declining player liquidity, Absolute Poker and Ultimate Bet have joined to form the Cereus Poker Network. The two brands, owned by Tokwiro Enterprises Inc, expect to become the third largest poker network by pooling their customers and hope to compete with the likes of the rapidly rising iPoker Network, as well as PokerStars and Full Tilt.

Paul Leggett, Chief Operations Officer of Absolute Poker and UltimateBet, said the Cereus Poker Network was the culmination of more than twelve months of innovation and development. He said the two sites will pool their customers in the new network, however there are no plans at present to merge and they will continue to operate under their individual brands. “Cereus not only delivers the best online poker experience; it enables our company to improve our operations and deliver significantly better value and service to our customers” said Leggett.

“Our company’s goal is to provide poker players with the ultimate online experience. The launch of Cereus is a major step for us in achieving our goal and we look forward to making many more exciting announcements very soon”.

While the likes of PokerStars and Full Tilt who also continue to accept US players have seen rapid growth, Absolute Poker and Ultimate have seen their customer bases dwindle as a result of insider cheating scandals and their inability to advertise in the key UK market. With criticism mounting this week on Ultimate Bet and the Kahnawake Gaming Commission (KGC) for their handling of the cheating scandal, and the KGC’s promise of further action to come, a further loss of player confidence is to be expected. By pooling both sites’ players onto one poker network, Tokwiro has gone some way in limiting the affect of a potential further decline in users, and GIG analysts predict that ultimately it will be the Cereus brand that survives.”

I suggest you check out an online article in the Economist titled “Poker is getting younger, cleverer, duller and much, much richer“.

Its like, way long, but it’s a good read, compiling quotes from top pros over the years and portraying the good, bad (and ugly? nah!) side of poker. It covers but does not dwell on the US anti gambling luck vs skill debate (and irony), but is really all about the changing environment for poker.

The article compares still-going-strong legend, Doyle Brunson, with savvy Internet players like annette_15 (a 19 year old Norwegian, Annette Obrestad) plus has plenty of colourful input and comment on other pro poker players along the way.

(…modern-day poker luminaries as Chris “Jesus” Ferguson, a hirsute scholar of game theory, Dave “Devilfish” Ulliott, a somewhat less cerebral but wily British professional who wears diamond-encrusted knuckledusters, and Phil “Poker Brat” Hellmuth, arguably the most celebrated (not least by himself) modern player…)

Here’s a few more quotes from the article:

Today poker is the third most watched sport on cable television in the United States, after car racing and American football, trumping even NBA basketball…while Britain has its own poker channel.

“It doesn’t take most young people long to realise they won’t be the next Michael Jordan. But they can all aspire to be the next Phil Hellmuth, and they don’t even have to work out,” says Mr Hellmuth, slurping a full-cream mocha.

After two weeks of poker, with daily sessions lasting up to 16 hours, Jerry Yang, a psychologist, went home $8.25m richer

Thomas Bihl, winner of a recent HORSE tournament, in which players have to show mastery of five different styles of poker, thinks the game has more in common with finance than it does with basic forms of gambling, because it requires the constant pricing and repricing of risk.

Ms Coren: “Cash is nothing more than chips, just the tools of the trade, like fishing rods to an angler. The game is all about money, and nothing to do with money.”

It blends with skill to produce a game that is “much like life, full of incomplete information and second-guessing,” says Mr Lederer. Poker is certainly more exciting to most than chess, a game of complete information and limited psychology where the better player always wins.

Ms Duke sees other ways in which poker teaches “life skills”. It taught her, for instance, how to be a good loser (“Even the best lose most of the hands they play. If you let that get to you, it will kill you”). She says she even uses poker theory when dealing with her children: “I always bet the minimum when making a threat. If you say no TV rather than no Disneyland, you can always raise later.”

A recommended read! Check it out here at The Economist.

Check out the latest poker site reviews:

>> BetOnline Poker Review & Rating
>> bet365 Poker Review

Finding the Low Cards in Omaha Hi/lo

A while back, I played a hand in an Omaha Hi/Lo Limit tournament that had everyone at my table jumping off their chairs. They thought I was crazy and couldn’t believe my play. But I made the right move. In fact, the play illustrates an important Omaha Hi/Lo concept that’s not widely understood.

Here’s how the hand went down.

It was a nine-handed table. The under-the-gun player raised and another early position player three-bet. Two other players called the bet cold. It came around to me in the big blind, where I held 9-K-Q-2. This is usually considered a pretty trashy Omaha-8 hand. But I didn’t fold here; I four-bet. I then flopped the nuts and took down a huge pot. When they saw my hand, the players went crazy. How could I four-bet with that kind of trash?

I could do it because I made some good assumptions based on the way my opponents played their hands. This was a tournament, where most players tend to be pretty cautious. Few will play any hands that don’t contain Aces, and just about everyone is sticking to hands with a lot of low cards.

So when the under-the-gun player raised, I felt pretty confident in assuming that he had an Ace with some other low cards. The same goes for the player who three bet. The two callers must also have had hands that they thought were pretty strong. I could be all but certain that all four aces were dealt to these players, and that they held a lot of the deck’s low cards.

I was also confident that, in this hand, the flop was going to come at the high end of the deck and that I’d have a chance to sweep a huge pot because there would be no qualifying low. And that’s exactly what happened.

This hand shows that in Omaha Hi/Lo, you can often make some good assumptions as to what cards remain in the deck and what the flop is likely to hold. For another example, say that you’re in the big blind and it’s folded to the cutoff, who raises. You see 9-T-J-Q. With all but one player folding, you can be pretty sure that almost everyone else held a number of medium and high cards. So the deck is ripe with low cards, which will probably help your lone opponent’s hand. Your best move is to fold this hand pre-flop and wait for a better spot.

Of course, the better your position, the more information you’ll have. So you shouldn’t even consider playing certain hands in early position. Something like 2-3-4-5 might be playable from the button or the big blind if there hasn’t been a lot of action. The lack of raising would show that the Aces haven’t been distributed and are still in the deck. But in early position, you just don’t know what’s out, so you need to muck the hand. The same goes for hands like T-T-J-Q and T-J-Q-K. There are times when prior action will show you that these hands are worthy of a three-bet or four-bet. But in early position, it’s best to just let these kinds of hands go.

Being able to predict a flop is part of what makes Omaha Hi/Lo so much fun. You really can’t do these sorts of things in Hold ’em. If you hone these skills, you’re sure to be a tough Omaha Hi/Lo player.

Mike Matusow

If you’re USA-based, like Mike, you can play some great online at Bookmaker Poker or BetOnline Poker.

The team at PokerLabRat.com get lots of inquiries from US Players concerned about the number of online poker rooms that no longer accept residents of the USA due to the new US anti-gambling legislation. Most poker sites that take USD do not necessary accept US Players.

Here’s a link to a page of fact sheets on the top online poker rooms that still welcome USA players. It may help you make your mind up where to play.

Best of luck at the tables
Elle

PS: If you’re USA-based, and can’t be bothered reading poker room comparisons or reviews, and want to just get into the action, Americans can play some great online at both Bookmaker Poker and BetOnline Poker.

With all the noise and confusion surrounding the banishment of US players from many online poker rooms it’s easy to forget that life goes on for the rest of us non USA-based Hold’em Hounds.

The market positioning and even the solvency of many online poker rooms has changed considerably as sites vie for their share of a smaller pool of poker players. As a player you should keep an eye on the financial stability of the site/s at which you play. (The #1 deciding factor for gambling site testing specialists, PokerLabRat.com, in recommending a poker room is confidence in the poker room operator’s ability to professionally manage player funds. Full stop. No b-shit avatar graphics, dinky little table features or tempting joining bonuses even come close to the significance of this #1 criterion).

That said, we are treading cautiously with all the talk of mergers and acquisitions in an industry where customers – that’s you and me – are simply considered cattle (well, rolled up into the company asset sheet anyway). Online gambling customer loyalty is an interesting challenge for these businesses as players are highly mobile and services are often difficult to differentiate.

The betting and gaming companies jumping ship on their existing poker network providers to retain the ability to offer US action is also a worrying trend. We will be monitoring the transitions to new providers accordingly.

Publicly traded companies make life easy for us. Their books are relatively transparent and their plans and actions are documented so their shareholders can make informed decisions about investment. This should also make it easier for you to make informed decisions about where to play your poker!

Elle

Two sites we all rate and recommend are UK’s bet365 Poker (top site on the iPoker network – Europe’s busiest and best) and Bookmaker Poker, a savvy Costa Rica based poker room on the WPN Network that offers US-based players excellent tournament opportunities.

A poker room guide on online gambling advisory site www.goonersguide.com