The European Union Court of Justice (CJEU) ruled earlier this week that Italian professional poker players will no longer have to pay income tax on winnings earned at tournaments in other EU countries.
Professional players Pier Paolo Fabretti and Cristiano Blanco were both targeted by the Italian government for their inter-EU winnings.
Under current Italian legislation, domestic gamblers do not have to pay income tax on winnings made at licensed, land-based casinos in Italy. They do, however, have to pay the tax on winnings made elsewhere. According to the Italian government, Fabretti failed to report €52,000 (approximately £41,000) from a game in Slovenia on the Italian Poker Tour. Blanco failed to report €410,227 (approximately £324,000) in winnings from three different tournaments.
Fabretti and Blanco’s defense hinged on the court’s interpretation of Articles 52 and 56 of the Treaty for European Union (TFEU).
The CJEU ruled in favor of Fabretti and Blanco, claiming that the Italian government’s laws were in conflict with the EU’s freedom of trade. The ruling claimed that it discouraged Italian poker players from moving to other countries, as it would repeal their tax exemption.
“The national legislation, by restricting the benefit of a tax exemption only to winnings from games obtained in the Member State at issue, makes the provision of services constituted by the organization of gambling for remuneration subject to different tax arrangements depending on whether that service is carried out in that Member State or in other Member States,” the court explained.
Representatives from the Italian government, in response to the ruling, defended the legislation by claiming it protected players. Not taxing domestic casinos means encouraging professionals to play at safer establishments.
The two poker players expressed relief at ruling, which has been ongoing since 2009. Bianco posted a new Facebook profile picture with the comment, “We won,” shortly after the ruling. The photo depicts him smiling at his CJEU seat in Luxembourg.
