Professional Gambler - To Trade Or Not To Trade - That Is The Question
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Published originally 16 October
betting is ‘tax-free’ in the UK – the professional gambler is outside
of tax. This is confirmed in HMRC’s Business
Income Manual (BIM), para 22015. The basic position is that
gambling, as such, do not constitute trading. This is not a new
either. Rowlatt J said in Graham v Green (1925)
9 TC 309: “A bet is merely an irrational agreement that one person
another person on the happening of an event.”
has stood the test of time. In an Australian case, Evans
v FCT (1989) 20 ATC 4540, Hill J said: “There has been no
decision of a court in Australia nor, so far as I am aware, in the
where it has been held that a mere punter was carrying on a business.”
A recent case
has tested this principle. In Hakki v
Secretary of State for Work and Pensions  EWCA Civ 530
Mr Hakki was a
professional poker player who made a living from his poker winnings. An
for Mr Hakki to pay child maintenance was applied for through the Child
Agency by the mother of his children (Mrs Blair).
with the Social Security Contributions and Benefits Act 1992 (SSCBA
s2(1)(b) and the Child Support (Maintenance Assessment and Special
Regulations 1992 Mr Hakki opposed the application on the grounds that
winnings do not constitute ‘earnings’ from gainful employment and
is not a self-employed earner, ie the profits from gambling.
It is very
interesting to note that the Upper Tribunal found that for the purposes
SSCBA 1992, gambling could be a trade, profession or vocation, and that
could be said to be ‘gainfully employed’ as a ‘self-employed earner’
therefore should pay child maintenance to Mrs Blair.
appealed to the Court of Appeal. Mrs Blair’s barrister argued that
poker playing amounted to a trade similar to that of a professional
tennis player. The barrister relied on the findings that Mr Hakki:
a target sum to win after which he stopped;
the table which was most likely to pay him;
on a television programme about poker for a few weeks, made it to the
won a prize;
the owner of his own website and communicated his strategies for online
his poker results over seven or eight years published on two other
the locations for playing poker.
The Court of
Appeal found that even collectively these findings do not amount to
organisation as to constitute a trade, profession or vocation. The
Appeal found that gambling is not a trade and the factors surrounding
must be common to many successful gamblers, eg choice of location,
target sums and the table most likely to pay. It was found that
appearances on television and Mr Hakki having his own website was not
evidence of organisation amounting to a trade or profession. It is also
interesting to note that the court was persuaded that it is possible to
a case in which a gambler’s winnings might be taxable, but it found
this case there was no organised seeking of emoluments and therefore no
adds to the ongoing discussion about whether a gambler in certain
can be taxed on his or her winnings.
Will there be
future legislation that brings gambling profits into the scope of
There has apparently been nothing to indicate that this is under review
the advent of very sophisticated techniques to make substantial profits
gambling. It has to be asked, what is “the case” that the courts can
taxable? Is that perhaps the case with sophisticated software?
About the Author
Supplied by Julie Butler F.C.A.
Butler & Co, Bennett House, The
Dean, Alresford, Hampshire, SO24 9BH.
01962 735544. Email;
email@example.com, Website; www.butler-co.co.uk
F.C.A. is the author of Tax Planning for Farm and Land
Professional), Equine Tax Planning
ISBN: 0406966540, and Stanley: Taxation
of Farmers and Landowners (LexisNexis).
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Article Published/Sorted/Amended on Scopulus 2015-04-02 10:15:23 in Tax Articles