CRA Wants to Tax Duhamel for Decade-Old Poker Wins

The Canada Revenue Agency cannot seem to figure out how to handle poker winnings. In fact, the government has never declared poker a game of skill, which means it is a game of chance.

However, the CRA has made a recent practice of pursuing taxes from winning Canadian poker players. This time, the agency has its focus on Jonathan Duhamel, World Series of Poker Main Event champion of 2010 and beneficiary of other poker ventures.

It has merely taken the CRA a decade to bring it to a boiling point. And Duhamel is prepared to defend in court his refusal to pay taxes on poker winnings.

CRA Side of the Story

The story appeared this week in La Presse (in French) and The Canadian (in English). The gist of the story is that federal tax authorities want $1.2 million in taxes from Jonathan Duhamel’s poker winnings…from 2010 to 2012.

The CRA wants $1.2 million in unpaid taxes for those years.

The CRA believes that Duhamel operated a business as a professional poker player and proclaimed himself a poker pro. For winnings obtained in that business, and as a resident of Montreal, he must pay taxes on his profits. He also received payment of $1 million per year in sponsorship payments and tournament buy-ins from PokerStars, beginning in November 2010.

In addition, Duhamel’s only sources of income are poker and investments.

Then, the CRA goes into some arguably odd claims:

  • Duhamel “behaves like a serious businessman” when playing poker.
  • He devotes an average of 40-50 hours per week to poker.
  • He “can play at eight different tables simultaneously” online.
  • Duhamel has above-average math skills and uses them to determine winning odds.
  • He is “constantly on the lookout for new strategies.”
  • He “carries out so-called” swaps with other players during tournaments.
  • Swapping with other players is a form of “hedging operations” and minimizing risked losses.
  • An agent has represented Duhamel since the 2010 WSOP.

Revenu Quebec may want to jump on the train as well for a similar amount of unpaid tax, though it is not joining in the court case with the CRA. It only exchanged information with the CRA and may use information from the court’s decision to determine its own course of action.

Duhamel Side of the Story

The 33-year-old Duhamel already paid taxes on his WSOP winnings in the United States, which is where he won the money. The rest of his poker income, he claims, is not taxable in Canada because that country views poker as a game of chance. Canada does not tax winnings from games of chance.

His other claims are interesting as well:

  • His 2010 WSOP Main Event win of $8,944,310 was by chance, not skill.
  • He never received poker training.
  • He never used a system of odds that overcame chance or controlled his chances of winning.
  • PokerStars only hired him for marketing purposes “to encourage other players to play online on the PokerStars website” because of his WSOP notoriety.

Interestingly, Duhamel is willing to go all the way with the claim that poker is a game of chance. Meanwhile, poker players in countries like the United States have long fought to declare poker as a game of skill to separate it from other forms of “gambling.”

Going to Court

The case will go to the Tax Court of Canada. A judge will hear legal arguments for both sides in March 2021.

Duhamel hired a lawyer that won a 2006 case in the same court on behalf of sports betting winners. Two gamblers won millions of dollars via sports wagers, and the Tax Court of Canada ruled that they did not owe taxes because they didn’t operate a betting business. Professional sports bettors, on the other hand, may be liable for taxes.

Interesting Choice of Poker Earnings

A look at Duhamel’s lifetime poker tournament earnings (in live events only) shows more than $18 million in winnings.

Prior to 2010, Duhamel only shows US$58,560 in live tournament earnings. From 2010 to 2012, though, he earned a total of $11,040,651. Without the $8,944,310 in the WSOP Main Event, he earned $2,096,341 during that time period.

Since then, from 2013 through 2018 (the last recorded live tournament cash), Duhamel added $6,913,527 to his lifetime earnings. That amount is not mentioned in the CRA case.

Not the First Time

Last year, the CRA opened an investigation into more than a dozen Canadian-residing poker players who didn’t pay taxes on their winnings between 2014 and 2016. The most well-known of the bunch were Pascal Lefrancois and Marc-Etienne McLaughlin.

The CRA tallied their live and online tournament earnings and looked at some of their expenses, i.e. car rentals and high-dollar purchases. The agency demanded documentation of online poker transaction histories, player-to-player transfers, and even deposit and withdrawal records from bank accounts.

That case seems to still be in some form of litigation, as I could find no records of a court ruling.

Lefrancois’ attorney said that several previous cases served as precedent that gaming winnings are not taxable in Canada.

Canadian Law and Precedent

This gets tricky because…well…I’m not a lawyer.

The Canadian government never mentions poker but does address income from gambling. The Income Tax Folio S3-F9-C1 notes that taxability is based on four criteria:

  • Taxpayer’s degree of organization in the pursuit of the activity.
  • Existence of special knowledge or inside information used to reduce the element of chance.
  • Taxpayer’s intention to gamble for pleasure or for profit as a means of making a living.
  • Extent of taxpayer’s gambling activities, including number and frequency of bets.

However, even the writing of the code suggests that “determining the commerciality of gambling can be challenging” when the CRA must decide what income is taxable.

One interesting case on the books at the federal court level took place in Ottowa in 2013. A poker player named Peter Radonjic of British Columbia applied for a decision against the Canada Revenue Agency.

Radonjic began winning  in online poker in 2004 and “making significant winnings.” He asked his accountant if his poker winnings from 2003 were taxable, and that person cited the aforementioned government code. Radonjic understood the accountant’s response to mean that gambling wins and losses were not taxable because he also worked a convention job, the income from which was taxable.

In 2004, though, Radonjic only played poker for a living. He then included his gambling winnings on that year’s tax return. And he did the same for 2005, 2006, and 2007.

Upon further research, however, Radonjic discovered that “CRA Interpretation Bulletins” were not legally binding but court judgments do set legal precedent. And court decisions showed that gambling winnings were not taxable. He filed to receive a refund of taxes paid from 2004 to 2007.

The CRA denied Radonjic’s request, saying each case is analyzed on its own merit.

Judge James Russell provided an interesting analysis for his decision. He determined that the Minister who made the decision to deny Radonjic’s request did so without any procedural unfairness or bad faith. However, Radonjic did make his case that:

  • The Minister concluded that Radonjic used a “system” to win because he played regularly for an extended period of time. This was erroneous.
  • Simply improving poker skills over time is not a “system.”
  • Establishing a payment account for winnings is not a “system.”
  • Winning at poker is “no indicator of a system or running a business with a reasonable expectation of profit.” Chance determines poker outcomes.
  • Using poker winnings to finance a mortgage is not indicative of running a business.
  • Computers used to win in poker were not “capital investments” for running a business.
  • Keeping records for tax purposes did not equate to maintaining business records.

Therefore, the Minister’s decision was “unreasonable.” The CRA was forced to reconsider the application for tax return adjustments and pay $1,550 to him to cover his court and consultation costs.


Duhamel has an interesting path ahead. He is seeking to prove, as the case above did, that poker is a game of chance. It is not a business, and the income from it is not taxable.

It seems that the Radonjic provides a solid precedent upon which to base his case, but it will be tough.


Jennifer Newell

Jennifer Newell

Jennifer Newell has been writing about poker and gambling since 2004. From her days in the WPT offices to covering summers of WSOP tournament action, she also followed gambling legislation to Washington D.C. and women-only poker to the Bahamas. Meanwhile, she lived in Los Angeles and Las Vegas for many years before moving back to her hometown of St. Louis, Missouri. Now, Jen travels less, writing about poker and online gambling from her home with her two dogs watching her every move. In her spare time, she follows politics, works on her never-finished novels, and learns Italian in the hopes of retiring to Italy someday.

If you want to know more, you can follow Jen on Twitter @WriterJen


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