would tax be payable on fantasy prizes?

[tommymooney]

purely a hypothetical question for me, but would you be liable for any form of tax on FS prizes? Guess it counts as gambling, and hence no? Only pay tax on recognised 'trades'?

[TAXMAN]

purely a hypothetical question for me, but would you be liable for any form of tax on FS prizes? Guess it counts as gambling, and hence no? Only pay tax on recognised 'trades'?

The position in the UK is that the public's winnings from betting and gambling (Fantasy Sports competitions are indeed a form of betting) are not taxable (unless you are a bookmaker):

http://www.hmrc.gov.uk/manuals/bimmanual/BIM22015.htm

This is well established and derives from the 1925 case of Graham v Green where a person lived by winning on horses. A similar case is Down v Compston in 1937 where a golf Pro bet regularly on games in which he played. It was held that his winnings were not taxable.

Most gamblers lose and therefore to tax winners would require losers could claim the losses so little chance of the Government changing the rules.

Even if you were a regular Fantasy Sports winner then the winnings would still not be taxable per:
http://www.hmrc.gov.uk/manuals/bimmanual/BIM22017.htm
where HMRC state that:
'The fact that a taxpayer has a system by which they place their bets, or that they are sufficiently successful to earn a living by gambling does not make their activities a trade. ....... having expertise or being systematic (‘studying form’) is not enough to create a trade of being a ‘professional gambler’. '

The position in other countried may be different (I believe gambling winnings are taxable in the USA).

[DrBunker]

Not that it's of concern to me as it's so unlikely I'll ever win any money (:() but that seems like a great answer, Taxman.

Can I assume this would apply for any professional gamblers e.g Poker players?

[tommymooney]

Thanks TAXMAN. Just the response I was hoping for! Multi-entrant fantasy sports ('investment') here I come...

[TAXMAN]

Can I assume this would apply for any professional gamblers e.g Poker players?

As far as UK tax rules are concerned the poker winnings by 'professional poker players' is exempt from UK income tax (but sponsorship fees and appearance money etc is likely to be taxable).

As per:
http://www.hmrc.gov.uk/manuals/bimmanual/BIM22017.htm

[DrBunker]

Can I assume this would apply for any professional gamblers e.g Poker players?

As far as UK tax rules are concerned the poker winnings by 'professional poker players' is exempt from UK income tax (but sponsorship fees and appearance money etc is likely to be taxable).

Excellent. I can now add "tax free income" to the list of benefits of my dream profession!

Thanks for the info.

[channel442]

Fantasy Football does not fall into the category of gambling so winnings are taxable by the letter of the law.

[quizking]

Fantasy Football does not fall into the category of gambling so winnings are taxable by the letter of the law.

No - from the very first line of the telegraph's own gambling policy page;

As a result of the Gambling Act 2005, pay-to-play fantasy games are formally considered a form of gambling.

And here is the fantasyleague version;

Under the terms of the Gambling Act of 2005, pay to enter fantasy games are formally recognised as a form of gambling as of 1st September 2007. Fantasy League is committed to endorsing a responsible attitude among its users; our Responsible Gaming Policy sets out our commitment to ensuring we fully comply with obligations to protect users and ensure that our pay to enter fantasy games are compliant with all laws and regulations.

And cleverTV have something similar too, and the other games providers, at least in the UK.

And this, from the requirements paper (december 2009) of the gambling act 2005 itself, showing that the organisers have to determine the extent to which the competition is a game of skill;

3.20 Finally, competition organisers will need to consider whether their competition may involve betting as defined in section 9(1)(c), as applied by section 11 of the Act. These provisions are designed, amongst other things, to ensure that prediction competitions, such as ‘fantasy football’ games, are regulated as betting products and thus can only be offered under a relevant betting licence. However, a bet is defined by section 9 to include making a bet on ‘whether anything is or is not true’ and other competition organisers beyond those running ‘fantasy football’ type schemes will need to consider whether they are caught by this definition and thus whether their schemes involve betting.

Thank you - that is all.

[channel442]

I did read the 2005 Act some time ago but it is still a very grey area.

For the purposes of the Act the entry fee is classed as a "stake" as far as I can see.

But this means that winnings from "free to enter" games are taxable because there is no "stake" so it is still not totally clear.

Basically its like saying the act of horse racing is not gambling but the act of betting on the outcome of the race is which is pretty logical. The fantasy games which most of us are familiar with are not pool betting games as covered in the Act so therefore they are not exempt in my opinion.

At the end of the day it's the Inland Revenue who decide whether winnings are taxable or not regardless of the opinion of the Gambling Commission.

Anyone care to email the Inland Revenue?

Thought not.

[TAXMAN]

Fantasy Football does not fall into the category of gambling so winnings are taxable by the letter of the law.

As quizking has said this is nonsense. See more at fiso's own article:
http://www.fiso.co.uk/articles/231/Gove ... g-Law.html" onclick="window.open(this.href);return false;

In the UK an individual is not taxed on winnings from playing fantasy sports games (whether one pays to enter or not). Much of the tax law in this area stems from the Graham v Green case I highlight above and you can see some commentary from HMRC at:
http://www.hmrc.gov.uk/manuals/bimmanual/BIM22015.htm" onclick="window.open(this.href);return false;