Italian poker pros recently got some favorable news after the European Union Court of Justice (CJEU) ruled that Italy can’t unfairly tax players for winnings earned in other EU countries.
The Italian government has a weird policy in place whereby they don’t take income taxes from poker winnings earned in nationally licensed, land-based casinos. However, they do levy income tax on money won in live poker tournaments outside the country.
PokerStars pro Pier Paolo Fabretti had become somewhat of the posterboy behind this policy. The Provincial Tax Commission of Rome claimed that Fabretti owed taxes on the €52,000 prize that he scooped for winning the 2009 IPT Nova Gorica High Roller in Slovenia. Rome’s Tax Commission also looked into his other tournament prizes over the years and required taxes on these too.
Roman poker pro Cristiano Blanco was another player whom the Commission was targeting. Blanco has over $835k in live tourney winnings, including €380,000 ($498k) that he picked up for finishing second at the 2007 EPT Dortmund (Germany) Main Event.
The CJEU’s reasoning for backing the poker players is that Italy’s policy of exempting domestic poker winnings and taxing foreign earnings restricts freedom of trade. Going further, poker pros would be less likely to play in other EU countries knowing that they not only incur travel costs but also extra taxes.
Another point that the CJEU made is that there’s no legitimate reason for the biased poker taxes because this policy doesn’t protect consumers nor prevent crime. Given that the CJEU sided with Blanco and Fabretti in this case, it will be interesting to see if any similar poker tax cases are brought to the EU in the near future.
