Randal D. Heeb

The appellant appealed reassessments for the 2009, 2010, and 2011 taxation years that included his net poker earnings as business income.

The Tax Court of Canada found that the appellant played poker in a non-recreational manner with the subjective intention to profit, organizing his life around the game and adopting objective standards of risk management.

The Court concluded that the appellant was operating a business and his poker earnings were taxable as business income.

The appeals for 2009 and 2010 were dismissed, while the appeal for 2011 was allowed in part to reduce his taxable income by $279,830 based on a partial consent regarding a specific tournament win.

The appellant, a world champion poker player, appealed reassessments that included his net poker gains as business income for the 2010, 2011, and 2012 taxation years.

The Minister argued that the appellant was carrying on a business through his poker gambling activities.

The Tax Court of Canada applied the Stewart test to determine if the activities were carried on in a sufficiently commercial manner.

After analyzing expert evidence on whether poker is a game of chance or skill, and reviewing the appellant's risk management, training, and profitability, the Court concluded that the poker activities were not conducted in a sufficiently commercial manner to constitute a source of business income.

The appeals were allowed and the reassessments were referred back to the Minister.