|
Deal-making
One area of tournament poker that is seriously overlooked by many players, and where a lot of money can be made, or lost, is the art of deal-making. There is never a requirement that a deal get
made, but it is somewhat common, as you near the end of the tournament, for players to agree among themselves to split the remaining prize money in some manner that is not identical to the official payouts.
There are some very good reasons to consider making a deal when you are down to heads-up, or the last handful of players, chief among them reducing variance. Imagine you are down to heads-up in the WSOP Main Event, and the difference between 1st and 2nd prizes is $3M. Even though this tournament has the deepest structure of any tournament in the world, unless your opponent is basically incompetent, your edge won’t be that big. And since this heads-up play is going to last anywhere from one hand to a few hours, short term variance (you can also call this “luck”) is going to
have a huge impact on who emerges the victor. Thus, if the chip counts are close to even, it would be perfectly reasonable for each of you to take something like $1.3M each, and play it out for the title, the bracelet, and the remaining $400K.
First things first. Before you even bring up the subject of making a deal, be sure that you are allowed to do so. Many tournaments forbid deal-making, and if you try to make a deal with your opponent, you might be subject to some sort of penalty. If you’re not sure, ask the tournament director, preferably in a way that nobody else can overhear, if deals are allowed. If not, I highly recommend you do not try to circumvent this rule by making any “secret” deals.
If deals are permitted, ask if the casino will enforce the deal. By this I mean, if you and I had agreed to the deal as outlined above, and your opponent ends up winning the tournament, will they be paid the entire first prize (and then you must collect your $1.3M from them), or will the casino deduct the $1.3M from their prize, and pay it to you on their behalf ? If the casino will not enforce the deal, now you must depend upon the honesty of your opponent to pay you as agreed. If you do not trust the opponent(s) completely to live up to the deal, then again it is highly recommended that you simply do not make the deal. There have been numerous
instances where a player agreed to a deal, “won” the tournament, was paid the entire first prize, and walked off without paying the agreed amounts to the other players. And since many, maybe even a majority, of poker rooms will not get involved in enforcing the deal, caution is important.
Another concern is reporting issues and tax implications. Many tournament results are published, and if the prizes are large enough, you will likely need to complete paperwork (typically a w2 g or 1099-misc form) whereby your win is reported to the IRS* for tax purposes. In some locations, state income taxes are withheld by the casino and paid to the host state. And if the player is not a U.S. citizen, the casino may be required to not only report the win to the IRS, but also to withhold 30% and give it to the IRS on the winner’s behalf. Even if you completely trust the player with whom you are dealing, if they were un- aware when making the deal that some of the prize would be withheld, they might feel that the deal needs to be modified now to take this into account. And that means you will be getting screwed.
Moreover, even if everything is handled properly at the time, you might suffer problems down the road when you are claiming a win that is smaller than what was in the IRS paperwork, or reported
publicly. The deal you made 4-handed might have been a good one, but when you end up later with tax problems, you might wish no deal had been made.
* This discussion is presuming the tournament is occurring within the U.S. Obviously, if you are outside the U.S. playing a tournament, similar issues might arise with respect to the tax burden in that country. Be sure you know the full implications of any tax reporting or withholdings before you make a deal, wherever you are playing.
|
