Posts Tagged ‘Investigation’

Israeli Tax Authority Targeting Poker Players for Investigation

 Israeli Tax Authority Targeting Poker Players for Investigation

According to reports from one of Israel’s business websites, several Israeli poker players are currently under siege, but not because they play poker. They are allegedly the target of the Israeli government and the Israeli Tax Authority for monies that are allegedly owed to the government.

The website Globes and writer Ela Levi-Weinrib are reporting that, along with those people potentially hiding revenue from real estate sales and foreign bank accounts outside the country, Israeli poker players have come under fire for either underreporting or not reporting their incomes accurately. According to Levi-Weinrib, these players are debating with the Israeli Tax Authority over how their income should be taxed and whether they should even be taxed because of the expenses they incur. The potential tax income for the Israeli government borders on tens of millions of shekels (the monetary base for Israel).

Levi-Weinrib states that, two weeks ago, the Israeli Tax Authority stepped up investigation of gamblers but particularly poker players. Not only were their live efforts under examination but also their online winnings, whether they were tournaments or cash games. The Israeli Tax Authority contends that the players were underreporting their earnings as well as reporting it as income from lotteries or gambling, which are taxed at 35%. The government organization contends that they should have reported their earnings as a business, which is taxed at a much higher rate of 50%.

Another debate, according to Levi-Weinrib, is that players aren’t allowed to deduct all their expenses from their earnings. While negotiations reached agreement to allow for the deduction of travel and lodging for the players, there was still disagreement as to whether the players could deduct their actual tournament buy-ins and provable losses. One case is demonstrating the rift between Israeli poker players and their government.

In that case, a player claimed that he began playing as a hobby about ten years ago. In 2010, the unidentified player – at least to Levi-Weinrib and Globes – went to Cyprus for a roster of events. While he apparently hadn’t planned to play in a $ 25,000 “High Roller” event, tournament organizers offered the player a free entry with a special agreement: whatever he won, he would receive 10% of the winnings after deducting the entry fee and taxes to Cyprus’ government (nothing was noted about the remaining 90% of the winnings). If he lost, then he didn’t owe anything.

The unidentified player went on to win $ 207,000, according to Levi-Weinrib, but his contention is that he only received $ 17,000 of that amount – 10% minus the buy-in and the Cypriot taxes. That player then stated to the Israeli Tax Authority that he went on to lose the entire amount while playing other poker plus $ 1500 he had brought with him from Israel.

A bit of investigation through The Hendon Mob reveals that the player in question might be Ori Miller. Miller played in the 2010 Full Tilt Cyprus Classic $ 25,000 “High Roller” event, where he finished in second place to Perica Bukara. Miller earned $ 207,337 for that finish, but his story of “losing everything” after that is problematic in that, five days later at the same festival, he won a $ 1000 Pot Limit Omaha rebuy tournament for a $ 36,905 score. Those two tournaments make up much of the $ 288,916 he won in 2010 (for the record, Miller has almost $ 750,000 in lifetime tournament earnings).

Another issue in this case is that the “unknown player” is being taxed on the entire amount of the winnings instead of what he alleges he received. The player has a declaration of facts from the casino owner that, under penalty of lying under oath, there was the arrangement between the casino operators and the player, but the Israeli Tax Authority is “not recognizing” that unique arrangement. The difference in the case is significant as it is whether the player would be taxed at roughly $ 223K U. S. dollars (what the Israeli Tax Authority says the player earned) or at roughly $ 16K (what the player says he received).

The outcome of this case is in the air now, but in past decisions the government has come out on top. In a past case against poker professional Rafi Amit, Levi-Weinrib reports that the courts already made the determination that poker winnings would be taxed as business earnings, but this still is a point of challenge in many cases because of the status of “professional” or “recreational” player. At stake will be how Israel treats its poker professionals – and their winnings – in the future.

The post Israeli Tax Authority Targeting Poker Players for Investigation appeared first on Poker News Daily.

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Investigation into Hialeah Park Poker Tournament Reveals “Irregularities,” Potential for Punishment by State Gaming Authorities

 Investigation into Hialeah Park Poker Tournament Reveals “Irregularities,” Potential for Punishment by State Gaming Authorities

After a thorough investigation into a tournament that was, from most appearances, run completely against every traditional norm of tournament poker in existence, state gaming officials in Florida have completed their investigation into the Hialeah Park Poker Room, resulting in several violations being marked against the organization.

The situation first came to the attention of Florida gaming officials back in September after a poker tournament was held at the Hialeah Park Poker Room. The tournament, a $ 250 buy-in event with a guaranteed prize pool of $ 200,000 and a first place prize guaranteed of $ 60,000, was held to celebrate the second anniversary of the poker room. But, to some of the players who participated in the event, it seemed that there were some issues with the way the tournament was allegedly conducted.

The tournament took place from August 25-30, with the August 25-29 days serving as five Day Ones with two flights running each day and the final day of the tournament on August 30. That isn’t out of normal procedure for tournaments – the World Series of Poker’s “Colossus” was run much the same way – and there were some special amenities for other purchases. A $ 20 donation to the dealer pool earned another 8000 chips (players got 15,000 chips for their initial buy-in) and an add-on of 8000 was available for another $ 20. Where it got tricky is where Florida gaming officials found that the Hialeah Park officials potentially violated gaming regulation.

According to Nick Sortal of the Miami Herald, a player in the Hialeah Park tournament said that the numbers didn’t add up when the players still in the tournament came back on August 30. “The prize pool was $ 215,000, but they said there were 1061 entries,” Allen Powers, who usually frequents the Seminole Hard Rock Poker Room in Hollywood, FL, stated, which would have made for a $ 265,250 prize pool. “Then they said, ‘No, 961 entries,” which still didn’t match the $ 215K that the poker room management announced as the prize pool. In addition to this, the total chips in play – listed on the tournament board as more than 27 million – would have actually been under 24 million with 961 players. Powers and other players also alleged that the Hialeah Park poker room management put players in the event for free, never collecting an entry fee from them, and put them in specific seats rather than random placement.

The investigation by Florida gaming officials seems to have found several instances where the Hialeah Park Poker Room violated gaming laws in the state. According to Sortal, surveillance video did not cover parts of the poker room that it should have, including the areas where cash was handled. In addition to this, money was kept in poker room manager Nelson Costa’s office rather than in the cashier’s cage or a specific vault area. This was another allegation of the players that buy-ins were not handled at “The Cage” as a normal casino transaction would have occurred, but instead handled at the floor manager’s desk.

Other violations were found by the gaming officials. Normally records are kept of the payouts to winners of a poker tournament at the cashier’s cage, where they are given receipts for their winnings. Gaming officials have found 13 players who didn’t have any receipt for their winnings and Hialeah Park Poker Room officials never released an official tournament report of the names of the winner of the tournament, the final table nor its payouts. Finally, gaming officials found that surveillance video was not preserved as according to law, tournament records were not kept for the required amount of time (three years) and jackpot accounts were not maintained. All totaled, 11 different violations of Florida’s gaming statutes were listed by gaming authorities.

All of these violations are going to be tough for Hialeah Park officials to refute. The manager in question, Costa, has since left his position at the Hialeah Park Poker Room, along with some of the staff (that was allegedly trained by Costa). Sortal does not indicate whether Florida gaming officials have been able to speak with Costa regarding the incident but, regardless of whether they have or not, Hialeah Park officials have until Monday (January 18) to respond to the litany of violations that have been presented to them by the state’s gaming officials.

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NJ DGE Publishes Amaya Gaming Investigation Report

 NJ DGE Publishes Amaya Gaming Investigation Report

The New Jersey Division of Gaming Enforcement (DGE) released an 89-page report detailing its investigation of Amaya Gaming’s acquisition of PokerStars and Full Tilt and the possibility of issuing the company a Transactional Waiver Order – essentially a probationary license – to offer online gaming in New Jersey. As we know, the Order was granted, so PokerStars and Full Tilt will be able to enter the New Jersey market when ready.

The report goes into gory detail about the history of the two poker rooms and their issues with the U.S. government stemming from both the Unlawful Internet Gambling Enforcement Act of 2006 (UIGEA) and Black Friday in April 2011. It continues to discuss the purchase of their parent companies by Amaya Gaming and how all that relates to their internet gaming application.

On just the second page, the report summarizes the green light it gave:

That investigation leads the Division to conclude that Amaya has demonstrated its suitability for a Transactional Waiver Order. While the PokerStars entities operated in violation of the law between 2006 and 2011, a number of considerations – including the severe criminal and civil sanctions imposed by the federal government, the complete and irrevocable separation of the previous owners and almost all of the former executives, the acquisition of the assets by Amaya and their incorporation into a robust compliance and control environment, as well as significant changes in the Internet gaming market since 2011– lead to a finding of suitability.

Most of the document, frankly, isn’t all that interesting unless you have a hankering for minutia, but things do perk up a bit when it gets to the investigation of current and former owners, executives, and management of Amaya, PokerStars and Full Tilt. The DGE traveled to the companies’ offices all over the world and conducted interviews with dozens people.

“In assessing the suitability of principal owners or senior executives (including consultants), the Division examines whether the individual was involved in the management or control of companies who were receiving, accepting or processing online wagers from United States players after the passage of UIGEA,” the report says.

“This suitability review to assess good character, honesty and integrity, also involves individuals who reported to principal owners and senior executives and those who had some decision making authority or control over marketing or game play to United States players or were involved in compliance, audit, payments or operations.”

Over 60 people were subject to review and perhaps interestingly, the DGE has required Amaya to terminate the employment of four of them (they were not named) if it wants to be granted an online gambling license.

Among the other requirements that had to be met before the Transactional Waiver Order was issued were:

•    Amaya has to give the state any funds still in the PokerStars accounts of former New Jersey customers.
•    A number of people are barred from ever having anything to do with Amaya including PokerStars founder Isai Scheinberg and his son, Mark, and former Full Tilt heads Ray Bitar, Chris “Jesus” Ferguson, and Rafe Furst. Howard Lederer was not mentioned.
•    Amaya must notify the DGE when it attempts to develop business in other jurisdictions.

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