Duhamel – Tax Court of Canada finds that earnings from winning poker tournaments were not the result of a serious and systematic approach, and were tax-free

In 2010, 2011 and 2012, the net winnings of the taxpayer from participating in in-person poker tournaments were $4.87 million, $0.38 million and $0.11 million, respectively. In particular, he was the winner at the no-limit Texas Hold ‘Em tournament at the World Series of Poker held in Las Vegas in November 2010, winning a multi-million dollar purse at the age of 23. In finding that such earnings were not from a business or other source and, therefore, were not taxable, Lafleur J stated:

[T]he Court finds … that Mr. Duhamel did not employ any system or strategy to manage or mitigate the risks associated with his poker business. … Mr. Duhamel was not acting as a serious businessman in his poker activities.

[T]here was no evidence that Mr. Duhamel had any systematic and serious means of winning tournaments. Mr. Duhamel does not employ any method of gathering information about his gambling opponents. …

… Mr. Duhamel partied very often and sometimes arrived at the various tournaments in a "morning after" state. …

Neal Armstrong. Summary of Duhamel v. The Queen, 2022 CCI 66 under s. 3(a) – business source.