Gamblers in Trouble with the Authorities

Getting a big win is a great feeling. However, in some countries the tax authorities and benefit agencies get involved with gambling wins and it can lead to trouble.

Mustafa Shalash from Hilliard in Ohio, USA, knows all about this. He won a $1 million Powerball prize six years ago. He didn’t receive $1 million though as there were taxes to be paid on his winnings. $290,000 had to be paid in taxes, leaving him with $710,000.

When it came to filling in his 2015 tax return, Shalash declared gambling winnings of $1,069,100 but falsely claimed the same amount for gambling losses. Doing so saw him get a refund on the taxes that had been withheld.

He’s ended up in court and prosecutors claimed that he only lost around $300,000 in that year. They added that Shalash wired his Powerball winnings abroad with the majority going to a bank account he has in Jordan. The prosecution case said that the account had over half a million dollars in it and at times, nearly a million. None of the required forms needed by the Treasury Department for these transfers had been submitted.

The Powerball winner admits that he’d made a poor decision. He’s been found guilty of filing a false income-tax return. Shalash will be sentenced in the new year and could receive three years in jail and a fine of up to $100,000. He’s pledged to pay back the amount owned before being sentenced.

Meanwhile in the Netherlands. a woman from Rotterdam has some problems. She’s been told that over €10,000 in welfare benefits must be paid back. This is because she did not disclose the fact that she’d been visiting gambling venues.

A routine check had been carried out two years ago and that included accessing her bank statements. This revealed that amounts between €10 and €100 had been withdrawn while at the Holland Casino and other gambling venues over the past year. Other amounts had been deposited and the local council weren’t happy with this. They decided that gambling had been taking place to win money and this should have been declared, even if losses had been incurred. A total of €10,888 must now be paid back.

A routine check in 2019, showed she had withdrawn amounts varying between €10 and €100 at Holland Casino and other gambling venues between 2018 and 2019, and that during that time she had also deposited amounts. This led the council to conclude she was gambling, an activity which is aimed at bringing in income and should therefore be declared, whether the gambler wins or loses. The council told the woman to pay back the whole amount over that year, some €10,888.

The woman has unsuccessfully appealed the decision. The judge said that while it couldn’t be proved the money had been used for gambling, that seems to be the likely use. He said the council was right to ask that amount as it wasn’t clear how much had been won.

Her lawyer Jacqueline Nieuwstraten said the decision “feels unfair” as many people are unaware of the need to report gambling activities while claiming benefits. Councils may say there are details on their websites, but most people don’t read those pages. She added: “Most people who gamble don’t increase their income, that is the whole point of gambling venues”