The 2016 WSOP of Tax BurdensNovember 9, 2016 11:48 am
Last Wednesday, Las Vegas resident Qui Nguyen entered the World Series of Poker history books after taking down the Main Event for $8,005,310. That figure represented almost one-third of the $25,445,388 that was featured at the Main Event final table, but nevertheless Nguyen did not receive the lion’s share of the prize pool. Instead, that honor went to the IRS who walked away with a huge $10,109,760 cut of the final table’s prize money.
Each year, the website taxabletalk.com produces an interesting break-down of all the federal and local taxes that the various players must pay to satisfy the tax man. Last year, for instance, Joe McKeehen stumped up 44% or $3,385,952 of his $7,683,346 in winnings as tax, leaving him with $4,297,394 for his famous victory.
This year’s winner, Qui Nguyen, on the other hand, paid a slightly lower rate of 41.51% overall, making him the second lowest WSOP Main Event tax player at this year’s final table. While for 8th place finisher Jerry Wong that rate fell to just 38.16% of his $1 million payout, runner-up Gordon Vayo, on the other hand, was hit with a whopping 51.46% tax bill, or $2,398,800 of his $4,661,228 in winnings.
While US players are used to paying such high rates of tax, Kenny Hallaert from Belgium didn’t have to pay a single dime in taxes after finishing in 6th place for $1,464,258. It’s not all plain sailing for European players, though, as the 2008 WSOP champion Peter Eastgate got to keep just $2,491,871 of his $9,152,416 first place prize. That figure included a 45% tax on his first $520,000 of winnings, after which the rate subsequently went shooting up to 75%.
Going back to the tax burden placed upon US players, which roughly halves their winnings, these pros also have to usually repay their backers who have helped funds their buy-ins to the various tournaments they enter. Needless to say, the impressive payouts that US poker tournaments advertise end up being just a small portion of what the winners eventually get to take home.