The Swedish Tax Authority “Skatteverket” launched a campaign against a large number of full-time poker players. Police have raided the homes of known poker players, confiscating equipment including computers and mobile phones, and served players with demand letters for full disclosure of poker winnings, both online and live, over the past four years, seeking undeclared taxable income from poker.
The unannounced raids took place on Tuesday by the Serious Fraud Office and were synchronized across the country.
In Sweden, poker winnings are considered tax-free regardless of whether you are a professional poker player or not but as long as your winnings are made within the EU. In the case of online poker, a poker player’s winnings are also tax-free so long as the winnings come from an online poker room licensed in the EU. Most pros have accounts on multiple poker sites but it is highly likely that the bulk of these winnings occurred on sites like PokerStars and Full Tilt Poker who are not licensed in the EU but in offshore independent territories outside of the EU. Only recently have PokerStars applied for a poker license from Malta, and EU country, for the benefit of their large Swedish customer base.
Sweden is known for having some of the best and winningest poker players in the world. In early 2011, famous high stakes Swedish pro Viktor “Isildur1” Blom was being investigated for $149 million in taxes by the Swedish government.
In Canada on the other hand, playing poker as a full-time professional classifies any poker winnings as taxable. On the flipside, professional poker players can claim poker losses and poker related expenses to offset against income.
One player, who’s laptop was confiscated, was informed by police officers that “extensive research” was performed by the tax authority. Such research included using public websites that track tournament results to determine the player’s winnings.
The letter was posted in full in Swedish Poker Magazine and demands players to report on what sites they have players on over the last four years and screen names used on sites such as PokerStars, Full Tilt Poker, Absolute Poker and Bodog, all licensed outside of the EEA. They have also requested info on tournaments played outside or the EU and corresponding winnings.
Players must also provide bank statements, credit card statements and statements from e-wallets such as PayPal, Neteller and Moneybookers in connection to online poker transactions.
Players who have poker sponsorship deals must also disclose that information.
Players being investigated have until December 10 to provide all the necessary information.