UK Poker Player Ordered to Hand Over Winnings after GUKPT Manchester Success

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Tuesday, August 14th, 2018 | Written by Lucy Brown

A UK poker player who took down the 2018 GUKPT Manchester Main Event in March for £68,930 ($95,404) received a nasty shock this week after being ordered to hand over his entire winnings to HM Revenue and Customs (HMRC).

Before British players start worrying that their poker earnings may be similarly at risk, however, be assured that poker winnings are not taxed in the United Kingdom, with the government instead claiming its pound of flesh directly from the poker and gambling operators themselves. Instead, Adam Lulat, a convicted fraudster, was targeted by HMRC over an unpaid fine stemming back three years.

Illegal Criminal Activity

In 2015, Adam Lulat was part of a six-man gang that was jailed for their involvement in a £40 million VAT fraud and money laundering scam. The scheme ran from September 2010 to November 2011, and involved the gang laundering dirty money through various banks located in the UK and abroad. HMRC subsequently worked with several European agencies as it worked to follow and ultimately dismantle a money laundering operation that passed through Germany, Poland, and the Czech Republic.

In addition, the gang ran a separate illegal enterprise involving VAT fraud in which they invented bogus businesses in order to make VAT repayment claims. Once again, they operated their scam across a number of EU member states.

All told, the gang was sentenced to a combined 25 years in prison and ordered to repay £590,000 of their illicit earnings. For his part, Lulat spent 28 months behind bars, but avoided repaying any money after claiming that he possessed no assets. Instead, the Preston Lancashire man had to pay a nominal confiscation order of just £1, although HMRC reserved the right to secure £237,449 from him later on down the line. Lulat was subsequently released from jail only recently, after which he took part in the £1,100 Grosvenor UK Poker Tour (GUKPT) Manchester Main Event.

Adam Lulat Wins £68,930 Poker Prize

Before his prison stint, Adam Lulat had just $17,489 in poker winnings from nine live cashes. On March 1st, however, he took part in the 2018 GUKPT Manchester Main Event, eventually managing to overcome a 241 player field over four days to claim its top prize of £68,930. At the time, he said that he lost focus during the main event, but managed to change his strategy to claim the victory.

Tax Office Alerted

Maybe he was concerned that his high profile deep run would alert the attention of the tax office. If so, he didn’t have to wait too long for their response as soon after news of his victory hit the headlines, Lulat was subsequently hauled in front of a judge at the Manchester Crown Court where he was ordered to hand over his £68,930 poker prize.

All told, Lulat had his £1 confiscation order increased to £71,770 on August 6th as he was also ordered to give up the £2,840 that he had accumulated in his bank account post-release. He has now been given three months to comply with the order, or else face another 15 months in prison. Following the case, Debbie Porter, Assistant Director, Fraud Investigation Service, HMRC, stated:

“Lulat thought he’d aced the tournament but we had the better hand in the end. We will not allow tax fraudsters like Lulat to enjoy their winnings until they’ve repaid what they’ve stolen from the taxpayer.”

HMRC also issued a further statement explaining that it would “relentlessly pursue criminals for their ill-gotten gains” and ensure that they pay back whatever money they owe.

Other Tax Cases

Few would argue that Adam Lulat got what he deserved, and that his loss was to the country’s taxpayers’ gain. Nevertheless, spare a thought for those players hailing from countries that impose exorbitant taxes on their poker players. At this year’s WSOP Main Event, for instance, US player John Cynn won the competition’s $8.8 million first place prize, but eventually walked away with $4.94 million after taxes. Meanwhile, New Zealand’s Alexander Lynskey collected $833,704 from the $1.5 million he won for placing 7th, while France’s Antoine Labat saw his 9th place finish worth $1 million reduced to just $567,426.

Perhaps the most vexing case of all, however, involves Spain’s Francisco Vallejo Pons who in 2011 won around €1 million playing online poker, although he ended up making a small net loss for the year once buy-ins were deducted. He has since been hounded by the Spanish tax authorities for €500,000 in taxes as the law at the time demanded that a 47% tax rate be paid on all online gambling winnings

These days, Spanish poker players are allowed to deduct their losses from their accounts, but Francisco Vallejo Pons and other players from 2011 have not been cut any slack and are still being pursued by the tax office and having their “lives destroyed.” In March, Francisco Vallejo Pons, a 5-time Spanish Chess Champion, even withdrew from the European Individual Championship in Georgia despite progressing through to the competition’s fifth round. A $1.6 million awaited its eventual winner, but the 35 year-old player pulled out after complaining of stress related to his ongoing tax dispute with authorities.