$80M Game?!?

[pokergripes]

The taxes point is a great one...assuming they are doing this in calendar '05 in the great State of Texas, I believe they're looking at a dead tax loss to start out (since gambling losses can't be used to offset non-gambling income and can't be carried forward to future years) equal to:

(0.45 [or thereabouts, depending on the effective marginal state and local income tax rates in Texas] x ($40,000,000 - outside '05 gambling losses of the winner of the freeze out)) - (0.45 x ($40,000,000 - outside '05 gambling wins of the loser of the freeze out)).

In other words, assuming the outside gambling wins and losses of the applicable players are likely to be much smaller than the freeze out amounts in question, the whole enterprise faces a major tax drag if played in the U.S.

[tpir90036]

Good point. Although I would imagine they were close enough to his terms for him to agree. The big question is who wants this game to happen more and who bent the furthest?

Some separate questions: Is it possible that the best players in the world would overestimate their edge in this game? Or do they just want to gamble it up for insanely high stakes?

[Howard Treesong]

[ QUOTE ]
the whole enterprise faces a major tax drag if played in the U.S.

[/ QUOTE ]

True. But the tax drag isn't likely to be symmetric. I don't presume to know what other gambling Andy B has done this year. If, as one might expect, the Corporation spreads its risk out among the poker community, the tax drag for the Corporation may well be much smaller.

Not that anyone in the poker world exaggerates losses for tax reasons, of course.

[Moonsugar]

dont know where you get your formula but:

1) there is no marginal federal rate of 45%

and

2) there is no income tax in texas

[MonkeeMan]

[ QUOTE ]
2) there is no state income tax in texas

[/ QUOTE ]

[RiverTheNuts]

[ QUOTE ]

Also, in my experience, very successful people don't obtain that success by treating $100 bills like Charmin.

[/ QUOTE ]

NINE IF IVE HAD CHILI

[RowdyZ]

Neither Texas or Nevada has a state income tax so either plcae they played they would be safe from that. However Corp members who live in California better watch out because that state will try thier best to get their hands on some of it. California tried to tax a company for a satellite they had in space. It was built and launched in another state and was in orbit over the equator but because that company had a headquaters in California they said it was taxable property. Heck they even tax the costumes of the Icecapdes.

[Scooterdoo]

Haven't read through this thread in its entirety so if someone else posted this link, sorry for the duplication. I think this will help explain more about who Beal is and what is going on:

http://www.cardplayer.com/poker_maga...php?a_id=14268

[BoBtheBLOGGER]

[ QUOTE ]
Also, in my experience, very successful people don't obtain that success by treating $100 bills like Charmin.

[/ QUOTE ]

Reminds me of my favorite thing I leared from watching Tilt... I better remember to bring an extra $1000 to the bathroom with me if I've been eating chili.

BoB

[pokergripes]

But still likely a material expected drag, if one makes the following reasonable assumptions:

--AB more likely to lose than the pros,

--AB likely to not have anything approaching $40 million of outside net gambling wins for '05 to offset the loss, and

--Corporation investors are more likely than not to have net outside gambling wins for '05 (since presumably those given access to this type of investment, who are also willing to remove the money from their own bankrolls for a significant period of time, and potentially forever, by making the investment, are otherwise net winners after expenses).

So, you have introduced only a secondary set of considerations to my insightful piece of primary analysis, as per usual [img]/images/graemlins/smile.gif[/img]