Should NZ online poker winnings be taxed?

Originally Posted on Friday May 6 16:39:00 BST 2011

Many of New Zealand’s top online poker players are earning huge sums of money, but virtually non of this is reaching the taxman.

Professional gamblers can put winnings straight into their bank accounts and keep them under the tax radar.  Although players are supposed to pay tax on their winnings, most do not declare any earnings.  The law is lax enough to allow them to get away with this.

The top online poker player from New Zealand is Richard Grace, who is estimated to have earned around $1.5 million.  He now lives in the UK.  The top ten earners on the list may have won up to $4 million between them.

The loopholes in the tax system arise because most people gamble as a hobby or pastime and winnings are therefore not regarded as taxable income.  However, when a person plays online poker as a living then the winnings should be regarded as taxable income.

It would be a very difficult thing to police, and this is probably why nothing official is ever done about the matter.

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