ESPN and taxes

[luckycharms]

Ok... some people are starting to consider poker a sport. It's on ESPN, and Raymer's 88 got #1 on Sportcenter Play-of-the-Day. Regardless of whether or not you consider it a sport, it is getting the exact same kind of coverage as a normal sport, like baseball. The advertisements aren't quite as extreme at the table as the ones scattered all over the baseball diamond, but you get my meaning. Anyways, WPT is now the Travel Channel's biggest show, and the WSOP is one of ESPN's most hyped shows, and has the best rerun value. ESPN pays for the rights to show baseball highlights, and ABC (or whatever station) pays millions and millions to air the Superbowl. The NFL profits immensely from their television coverage, and that profit is reflected directly in their player's incomes. Additionally, NFL players don't pay a 49% tax on their income, and they don't have to pay $10,000 to enter every game.

Some of this can't be helped, but there is a discrepency between what poker is giving to ESPN and what ESPN is giving to poker. I don't think that ESPN is responsible for paying superstar players for being on TV and boosting their ratings, but I do think that it's ridiculous they don't give anything back. Isn't there something someone can do to make them pay? This post will be edited into completion soon.... I gotta go. Comments are welcome.

[Jimbo]

[ QUOTE ]
I don't think that ESPN is responsible for paying superstar players for being on TV and boosting their ratings, but I do think that it's ridiculous they don't give anything back.

[/ QUOTE ]

I don't watch poker on TV to see Phil Helmuth cry on his momma's shoulder nor to see Annie and Howard embrace after they have both busted out of a tourney. Nor to see Mike M. to act foolish, these are all unfortunate byproducts of the production.

You are forgetting that obviously nearly any player can win a poker tournament. The skill level required to win is so low compared to other sponsored sports that there are no real superstars. Only players who enter more tournaments than others.

Unless you figure out a way to change the rules of the game to increase the chances that the better players will win a larger precentage of the time they are owed no extra money just for being lucky that particular week. Then you generate a new set of problems, by changing the rules and decreasing the chance an amateur has to win the groundswell in participation will again decrease and you are back to square one.

I'll be the first to admit that there are many people who enjoy a good soap opera. These folks probably do consider some of these players as part of their family. I'm just not one of them.

Jimbo

[Easy E]

Think this is a better setup to determine true "skill" wins, or is it still too short-term?

[Kurn, son of Mogh]

NFL players don't pay a 49% tax on their income

There is no difference between poker winnings and an NFL (or any other) salary. Both are *ordinary income* from the IRS' perspective. In that respect both pay the same tax rate providing their overall income for the year is in the same tax bracket.

[luckycharms]

If I'm not wrong (which I may well be,) isn't there a 49% tax on "gaming" wins over $2,000? Maybe this is only in certain places, and maybe poker doesn't fall under "gaming".... can someone clear this up?

[Jimbo]

[ QUOTE ]
If I'm not wrong (which I may well be,) isn't there a 49% tax on "gaming" wins over $2,000? Maybe this is only in certain places, and maybe poker doesn't fall under "gaming".... can someone clear this up?

[/ QUOTE ]

I suppose there could be some combination of State and Federal tax rates that combine to a total of a 49% tax but as Kurn mentioned the identical rates would apply to anyone with earned income in the same State or set of circumstances.

Put simply gaming winnings are simply earned income.

Jimbo

[fnurt]

There is absolutely no special tax on gaming wins.

[luckycharms]

Ok, continuing the thread:

So, when a stock car racer wins a big race, he's not only paid for the amount of people present in the stands, but also receives a large payment paid indirectly (through advertisements) by the thousands (millions?) of TV viewers. Miller Lite is catching tons of customers (many young, too) with their advertising on the WSOP. ESPN is making a killing off those ads, because, all it has to pay for is the cameras and editing. Does Binion's profit off the TV coverage? Who does ESPN have to pay to make all the money it's surely making?

In short, Helmuth pays $10,000 to enter a crapshoot to win 49% (or whatever it may be) of a fair portion of the prizepool. Though ESPN, Miller Lite, Cialis, etc. make a FAT profit out of his whining, he doesn't see any of it unless he places? This just seems wrong to me.... my proposal: ESPN & affiliates pay the taxes on all the prizes.

I'm sure some of this is wrong/misguided. I know nothing of big money tourneys , the media, or taxes. Comments are more than welcome.

[Jimbo]

I think I see your problem Luckycharms. You are equating a young sport/game that likely has much less profit than you believe to long established sports with a proven return.

Give it ten years to prove poker is still profitable for advertisers and networks then begin to expect sponsorships and profit sharing.


Jimbo

PS: Personally for a guy to drive in circles for a few hours and to get anymore than to keep his life is way overpaid. /images/graemlins/smile.gif

[jcx]

TV coverage has brought an explosion in dead money entering big time tourneys, which has created overlays for top players. So they are getting paid by ESPN & The Travel Channel, just indirectly. The prizes being handed out these days are just incredible and would not be 1/2 as big without the TV exposure.

[rickthekeg]

[ QUOTE ]
Does Binion's profit off the TV coverage? Who does ESPN have to pay to make all the money it's surely making?


[/ QUOTE ]

I believe ESPN has to pay Binion's/Harrah's for the rights to broadcast the WSOP (although I remember seeing how much they paid in 2003, and it was ridiculously low).

[ QUOTE ]
PS: Personally for a guy to drive in circles for a few hours and to get anymore than to keep his life is way overpaid.

[/ QUOTE ]
Oh my God that is funny!

[Neil Stevens]

[ QUOTE ]
I believe ESPN has to pay Binion's/Harrah's for the rights to broadcast the WSOP (although I remember seeing how much they paid in 2003, and it was ridiculously low).

[/ QUOTE ]I'm sure Harrah's doesn't want to make ESPN consider dropping the WSOP and running other poker tournaments instead. They get their cut from the hundreds of extra players anyway, so overcharging ESPN would risk killing the golden goose.

[TransientR]

I think some of the big name players, while statistically less-and-less likely to win the WSOP (lets face it, with 2500+ players, the likelihood of any one player to win is a crapshoot), are still finding ways to make more $ off of the poker boom through books, DVDs, and these big money invite tourneys like ESPN's "Bad Boys of Poker" etc., where just having a name gets you the chance to play basically a sit'n'go for huge $.

TransientR

TR

[Paul Phillips]

[ QUOTE ]
There is absolutely no special tax on gaming wins.

[/ QUOTE ]

There is in some places (http://www.mstc.state.ms.us/taxareas/individ/Notice%20to%20Casino%20Patrons.pdf).

They steal 3% of the gross from everyone, resident or not, with no opportunity for anyone to take deductions against it. So if I win $100K in a tournament they will take $3000 even if I have $100K or more in tournament buyins.

This is an incredibly scummy pure money grab and if it's not illegal certainly ought to be. I hate playing in tunica anyway so this is making me lean toward dropping it from my schedule.

I'm sure poker players can look forward to many more money grabs from local governments.

[fnurt]

My bad, Paul. I knew there was no such tax in NJ or NV but I shouldn't have been so sweeping in my statement. State governments are free to go hogwild on this sort of thing.

[rjc199]

Prize money will come, but it will take a while. NASCAR was nothing until about 12 years ago. They were on TV, but it was a nitch on ESPN. Nobody paid much for advertising. The prizes for races weren't that large.

I think poker is at the point nascar was in 1985. It has a weekly series now. Some players have sponsors. I think that within the next 5 years we will start seeing sponsors putting up prize money for tournaments. Sometime we might also see a "team poker" type event or a WPT-ish season with a points standing. When that happens it will be seen as a real event like golf and it will get humungo.

[MicroBob]

Some of these bigger names actually ARE getting extras i think.

Aren't the players in the 'Tournament of Champions' playing in a free-roll essentially?
Same for the PSI on Fox-Sports Net i think. And the WPT has had some freebie type tournies before as well I believe.

I'm not positive on this so anyone feel free to correct me.


beyond that, I don't exactly feel sorry for these guys....if they want to try to make money out of public appearances or book-deals based on their fame then go for it.
ESPN is practically advertising their likeness for them. It's up to them to follow through if they are so inclined.


The games have probably never been more profitable for any 'big-name' player. If they don't like the construct then they don't have to play.

[Jaquen H'gar]

The analogy of NASCAR and poker is already in place. NASCAR is owned by a SINGLE family. This means the hundreds of millions that TV Networks and Nextel provide go to NASCAR (France family). NASCAR uses this money to upgrade their tracks (they own most of the superspeedways) and go into their pockets. This money is not used for prize money. The prize money comes from the sponsor of the individual race. The driving teams, all privately owned, must pay for their car/testing/salaries. They get money from their individual sponsors. This is all very similar to poker.

NASCAR = Harrah's/Horseshoe
Racetracks = casinos
Nextel Cup Series = WSOP events
Busch/truck events = other televised poker tournaments
ESPN/ABC/etc = ESPN/Travel/FSN etc
Racing team expenses = tournament entry fees
Sponsors = backers or advertisers (see the polo shirts/hats)

It costs more to run a single racing team at an event than the prize money given at an event. Thus sponsors are required or there wouldn't be racing teams. It doesn't cost more to "run" a poker player than prize money given. Poker players don't have the power to negotiate at the big time level, just like individual racers don't. That's why NASCAR and Harrahs will pocket the money. As poker becomes more popular, ESPN's cut will lessen and Harrahs/etc will increase. It's simple economics.

<font color="green"> </font> If you're big star bound, let me warn you, it's a long hard ride <font color="black"> </font>