The global online poker industry is flourishing as online poker operators are finding better ways to market and reach a younger audience. The ability to play online poker from the comfort of one’s home and make money on a regular basis is very appealing and has caused thousands of millennials to take up a career in online poker.
There are a number of online poker players who make well over 6 figures on a yearly basis but not all of them disclose their winnings and pay the required taxes. Governments across the world are slowly turning their attention to the online gambling industry and come up with new regulations that will ensure online poker players pay their taxes correctly just like every other law abiding citizen.
The United Kingdom has been keep a close watch on its online gambling industry and a recent crackdown on online poker pro Adam Lulat was yet another reminder that the online poker industry in the country is under surveillance. While we must point out that Lulat is not your regular online poker player as he has a prison record, one can assume that if the authorities are monitoring Lulat’s online poker activity, chances are that there are other online poker players under the scanner.
Adam Lulat
It all started in 2015 when Adam Lulat was sent to jail for 28 months for his role in a £40 million money laundering scheme. He and 5 others were sentenced to a combined 25 years and 10 months on top of being ordered to pay back £590,000. However, Lulat lacked the funds and he was ordered to repay a paltry £1.
HMRC did an investigation in which Lulat was found to have been part of a gang that moved about £40 million in dirty money through several banks located in the UK and other countries. This scheme began in September 2010 and ran through November 2011. HMRC investigators followed a trail that went through Germany, Poland, and the Czech Republic. Several European agencies worked together to expose the money laundering operation
It was also discovered that Lulat and his crew were involved in a separate illegal venture involving VAT fraud. The criminal group made up bogus businesses so that they could make VAT repayment claims. They pulled the scam in several EU member states. He served his time in a UK prison and was recently released. He went out into the real world and started playing online poker.
Ordered Back To Court
Lulat’s luck appeared to take a turn for the better when he entered and won a poker tournament in Manchester back in March. The poker gods may have been smiling on him but Her Majesty’s Revenue and Customs (HMRC) certainly weren’t. HMRC dragged Lulat back to court where he was ordered to give up his £68,930 poker prize.
On top of losing his prize money, Lulat was also ordered to hand over £2,840 that he had stashed away in his bank account. He must comply within three months or he will be facing another 15 months behind bars. HMRC’s Assistant Director of Fraud Investigative Services referenced having a better hand than Lulat in the end. Debbie Porter went on to say that HMRC will make sure that tax fraudsters repay what they owe taxpayers before they can enjoy their winnings.
Who Else Is HMRC Watching?
Porter stressed that the HMRC won’t go away and they will relentlessly go after tax cheats to make sure they pay their bill one way or another. She also urged the public to contact her office if they had any information about tax crimes. This should make any tax fraudster think twice before they set their sights on winning big at a poker tournament.
This isn’t the first time that authorities have gone after poker prizes. Francisco Vallejo Pons of Spain was given a 6-figure tax bill in 2016 after he won over €1,000,000 in poker money back in 2011. All of this in spite of the fact that he lost all of that money playing poker over the next couple of years. The taxman is currently trying to get €500,000 out of him. In 2011, money won in Spain through online gambling was subject to a 47% tax and losses were not deductible.
Online poker players in the UK will be well advised to pay their taxes and not take the risk or they could be dealing with the HMRC.