Swedish Tax Authority Using Internet Sleuthing to Find Poker Tax Dodgers

Yes, it is the year 2014 and yes, everyone should know this by now, but I suppose this should be a warning to everyone: don’t post things on the internet that might come back to haunt you. Sweden’s IRS-equivalent, Skatteverket, has been combing the internet to identify online poker players who have been avoiding paying their taxes.

On Monday, Radio Sweden welcomed guest Dag Hardyson, an internet specialist with Skatteverket. In the interview, Hardyson revealed that the Swedish Tax Authority has already uncovered about 50 poker players this year who have failed to report their gambling winnings from sites outside the European Union. European Union tax law says that gambling winnings from within the EU are not taxable, but any winnings earned outside the EU are subject to a 30 percent tax.

To root out the poker players, Hardyson said that Skatteverket has worked with authorities in “tax havens” as well as simply doing what any of us would do: read public resources like poker message forums and poker databases, such as highstakesdb.com and pocketfives.com. For many online poker players, but of the internet poker culture is to make a name for oneself and therefore thousands of players willingly volunteer their screen names and real names to data mining sites so that there is a public record of their poker playing prowess (five times fast!). At the same time, many successful players are well-known on message boards. Though it is hard to find “real life” information on some players, dirt on most can be dug up with enough effort. 

“As far as I know, this is the first time that we have used the opportunity to seek information about unidentified people,” Hardyson said in the interview.

“We have used a methodology that can be now also tried in different cases,” he added. “…the system of nicknames exists within many different types of gambling.”

Hardyson also said that many of the players investigated, as one might expect, are professional poker players. So far, Skatteverket has uncovered a staggering 250 million Kronor, or around $34.6 million, in unreported gambling winnings.

According to CalvinAyre.com, a number of Swedish online poker players have already received letters from Skatteverket requesting information about their poker playing and winnings from 2008 through 2011. More specifically, the site says, the letter asks about winnings from sites located outside of the EU, naming PokerStars, Full Tilt Poker, Absolute Poker, and Bodog as sites in question.

The article also says that the Swedish Tax Authority is specifically requesting that the players voluntarily provide their poker screen names. The Authority would then look up those names in using the resources discussed above to see if those numbers jive with what the players self-reported.

At the end of the piece, the author, Bill Beatty, took particular pride in Bodog’s efforts in thwarting data mining (Calvin Ayre is Bodog’s founder, the site is essentially Bodog’s mouthpiece):

While I would never suggest that poker players avoid paying their fair share in taxes, one of the companies on the list, Bodog Poker’s switch to anonymous poker has made it impossible for these smarmy data mining sites to extract their poker players game histories from the site.

With the absence of this pilfered data, it would be next to impossible for the tax authorities to find out about any of a Bodog poker player’s winnings and they would have next to no evidence to present in any subsequent court proceedings on tax evasion.

Or, you know, people could just comply with the law and report their gambling winnings properly.

Dan Glimme, Unibet’s poker ambassador, told the Swedish newspaper Aftonbladet that this shows that Swedish players would be wise to just stick to poker sites within the European Union. Of course, that suggestion is completely self-serving, considering Unibet is based in Malta. Yes, you should definitely come play at our much smaller site and avoid all the action over at PokerStars because we’re based in the EU. Please come play here. We beg you.

In all seriousness, if a Swedish poker player, particularly a high volume, high stakes player, can find enough action at a European-Union based site, it probably wouldn’t be a horrible idea to play there if he is going to comply with Swedish tax law. That 30 percent tax hit is not at all insignificant and would take a big bite out of the player’s profitability.

Either that or figure out how to erase all traces of your poker identity on the internet. Time to petition for a screen name change and not worry about being recognized.