Spanish chess master to pay €500K taxes after poker loss?

Francisco Vallejo Pons, world-class chess player and recreational poker player shared a horrible story about his fight against the Spanish Tax Authority on his Facebook page.

Pons mysteriously left the currently ongoing, European Individual Championship after the fifth round. As he's never left a tournament early before, many people were speculating about the reasons behind his decision. He gave the answers to the questions on his Facebook-page shortly after.

Spain's number 1 ranked chess player also used to like the game of poker. Back in 2011, he played some online games, which he didn't find as entertaining as chess, so he quitted online poker, booking a small loss of a few thousand dollars.

"I would say that I was not even a big fan. I read some books at the time, but I do not fit at all in the profile of a "player." I thought I could win, and when I realized it was not like that, I left it. It is a very repetitive game and, unlike chess, you really do not enjoy playing a lot." - Vallejo told El Mundo, the second largest printed daily newspaper in Spain.


Vallejo Pons at the Isle of Man tournament in October 2017 (Photo: Peter Doggers/Chess.com)

This story itself would not worth an article, but what happened five years later might. Francesco received a letter from the Spanish Tax Authority in 2016, in which they claimed that he owes more than €500,000 worth of taxes, because of his poker winnings. Naturally, he wasn't too concerned about this at the beginning. But as it turned out later, this seemingly funny letter turned his life into a never-ending torture.

According to a former law, "gambling" winnings were subject to 47% taxes in Spain, back in 2011 while losses couldn't be deducted. This means, that if a player had won 3 pots for $100 each and then lost 4 pots with the same amount (resulting in a $100 loss) he was still considered a winner all-in-all and was forced to pay almost half of his "winnings" to the authorities.

It's easy to see that this law is mind-blowingly unreasonable. Francisco was never even close to winning €1,000,000 as the officials claim, he quitted poker as a loser. The law ceased to exist in 2012 but they didn't apply retroactivity in the new law. The chess master is not the only one in Spain, who suffers from this weird rule, there are hundreds of similar cases. The painful situation made Vallejo take a break from chess, as he's unable to focus on his matches.

Whether the authorities come round on the ridiculous law is yet to be seen, the only thing certain is Vallejo still tries to the ruling overturned.