Taxes – the Unwanted Companion for Every Big Win
"Death and taxes." The old cliché has never been truer than when you win at the WSOP. When you watch a $10 million sum flash on the screen, few realize that the winner often takes home a third or even half less than that. For example, when it comes to the WSOP, tax rules in the USA are relentless:
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Domestic players (USA citizens) – pay 24% federal tax on winnings above $5,000. Additionally, they must self-report and pay state tax, which can be another 5–13% depending on the state.
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Foreign players – if they do not have a completed W-8BEN form and their country of origin does not have a tax treaty with the USA, 30% is automatically withheld from the winnings. And that’s just the beginning: in their own country, players often must pay even more taxes, which can range from 0% to 50% of their winnings.
The Magic W-8BEN Form
If you are a foreigner, this document is your ticket not to lose 30% of your winnings on the spot. Thanks to the W-8BEN, you can request payment without automatic tax withholding – if your country has a tax agreement with the USA. Without this form, the WSOP will only pay you 70% of your winnings, and you’ll have to painstakingly claim the rest from the IRS later.
Examples that Hurt
The joy from a great finish and a million-dollar win often lasts only until players discover the tax obligations waiting for them. Here are some examples from recent years when a winner’s wallet took a big hit:
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Felix Stephensen (Norway) – The greatest achievement of this young Norwegian was second place in the 2014 WSOP Main Event. He then had to swallow a bitter pill with a more than 50% tax on his $5.1 million winnings. Poker was his profession, which changed his tax classification. Stephensen had already lived in London for two and a half years, where he would not have had to pay any tax on these winnings. However, Norwegian citizens only stop being liable for taxation in their home country after three years of living abroad.
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Hossein Ensan (Germany) – The Iranian-born player won the 2019 WSOP Main Event. His $10 million turned into $5.4 million after paying tax as a professional player in Germany (46%). Even more disappointing for Ensan is that if he had been registered as an amateur player, he would not have had to pay a single euro in taxes.
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Andres Gonzalez (Spain) – He lost almost half of his winnings for 6th place at the WSOP Main Event 2024. In the USA, he didn’t have to pay any tax, but the Spanish income tax rate in his case was 47%. His $2 million win, after taxes were deducted, barely remained in the seven digits.
Losing half your money after a life-changing win is never good news. But while the above players lost a significant portion of their winnings, at least they didn’t end up like this scary tale:
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Dragan Kostic (Spain) – The Macedonian-born player won €532,000 for 2nd place at the EPT in Barcelona in 2011, but did not declare the winnings in his tax return. The Spanish tax authorities “found” him through the Hendon Mob database. The result? 18 months in prison, a €400,000 fine, and €230,000 in tax arrears.
Winners with the Right Address
Many players appreciate the importance of residency even before they achieve success. Thanks to this, they either stayed in their home country, which doesn’t claim high percentages from winnings, or moved to a country where they found more favorable conditions.
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Koray Aldemir (Austria) – The 2021 WSOP Main Event champion is originally a German player, but unlike Hossein Ensan (the 2019 WSOP champion), Aldemir decided to move to Austria, which proved to be a good decision. In Austria, poker winnings are tax-free, so Aldemir didn’t have to give up any of his $8 million winnings.
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Boris Angelov (Bulgaria) – Thanks to the tax treaty between Bulgaria and the USA, no tax was withheld from his $2.5 million winnings for 5th place at the WSOP Main Event 2024. Nor did Angelov face heavy taxes at home, as he only needed to pay 10% income tax and kept the rest.
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Martin Jacobson (UK) – Jacobson is Swedish, but his permanent residence is in the UK. This was already the case when he won the 2014 WSOP Main Event, when he added $10 million to his account. He paid 0% tax on this sum, because poker is not considered taxable income in the UK. Let’s recall that his final table opponent, Felix Stephensen, by contrast, had to give up about 50% of his $5.1 million win to taxes.
The Importance of Life Decisions
Not everyone can master the tax labyrinth, but those who do have an edge that can be the difference between a dream life and a tax nightmare. You can be the best player in the room, but if you don’t understand the tax system, you can end up a loser. The poker world isn’t just about how you play the cards – but also about where you play them, and where you have your winnings sent.
Source: PokerNews, PokerDiscover, CardsChat, VG, Winamax