WSOP Insight: A Poker Player’s Guide to Divorce
Marriage – a notoriously volatile institution to begin with – often grows downright incendiary when confronted with the lifestyle of a professional bettor. While a privileged few may find palpable sex appeal in their spouse emerging at all hours of night, wreaking of a casino’s tobacco and stale liquor-infused air supply, many domestic unions simply cannot withstand the de facto graveyard shift of a professional grinder. Throw in the hefty travel that accompanies a career spent chasing tournament purses alongside the inevitable bankroll fluctuations, and it is easy to see why poker is, to paraphrase Ralph Waldo Emmerson, a jealous mistress.
Adding insult to injury, many courts and domestic relations attorneys are sincerely naïve to the economic realities of a hold'em-derived income. It is not merely that they regard “professional gambler” as a stigmatized term of ill repute – it is, too, that the judiciary tends to regard with the gravest of skepticism the economic claims of any spouse (and, more starkly, parent) who cannot readily produce a W-2 or 1099 commensurate with his or her lifestyle.
To be sure, 50 states have 50 separate sets of statutes and doctrines governing divorce, and this diversity of legislation reduces every suggestion herein to a generality overrun by exceptions and outliers. But if your vows are in jeopardy of termination, it is sensible to consider these topics, and to consult not merely with a matrimonial attorney but, too, with a gaming lawyer – the economic implications of not meshing these two normally diverse specialties can be far worse than any fate suffered at the whim of a deck of cards.
Alimony and Child Support: How to Manage a Fluctuating Income
Alimony – monthly payments meant to aid a divorced spouse in maintaining a certain style of living – and child support (a relatively self-explanatory term) are seemingly omnipresent issues in divorce proceedings, and each requires courts to take note of both spouses’ respective incomes. In fact, child support is often the byproduct of a mere formula, where income is crunched alongside various expenses and the resultant obligation is mandated with little opportunity for parties to argue over its equity. Thus, the key is not contesting the obligation, but rather contesting the figures computed to arrive at that obligation.
With poker players (as well as other bettors), there is ample opportunity for a skilled attorney to persuade a court that gross income ought not be considered. The trick is regarding net winnings as an amorphous number and chiseling it down with a full array of factors, regardless of whether the Internal Revenue Service permits each such deviation. To be sure, income for divorce purposes is not synonymous with income for tax purposes.
Simply netting income by deducting losses from winnings is a surefire way to overstate earnings. A court should be made aware of other perfectly reasonable – albeit potentially idiosyncratic – deductibles. Travel costs and lodging for tournaments strike as obvious items to back out of the bottom line; ditto the difference between dining costs on the road and grocery costs at home. But for those grinding marathon sessions, there is no reason not to also endeavor to take a write off for designer shades, Beats by Dre, iTunes bills, and cab fare or gas bills. If the poker room is an office, these are office supplies, and over time they add up.
Of greater concern, though, may be the time period in which income is measured. The standard deviations in a cash bankroll are appreciable; the standard deviations in tournament play can be exponentially greater. So if a court is looking to assess income on a trailing three-year basis, and a divorcee has three World Series of Poker final tables in one of those years and only a handful of cashes in the other years, it behooves counsel to argue the one year should be regarded as an outlier or set off against a larger swath of historic periods. The law is only interested – for these purposes – in realistic future expectations; analytical time frames can – and should – be massaged to sharpen the focus on that reality.
Cold Cards and Career Choices: Why the Court May Tell You to Get a Real Job
“Voluntary impoverishment,” an offensively hyperbolic phrase by any non-litigious standard, can easily become the downfall of a professional player drawing cold cards. And, once again, the strategic emphasis of certain gaming periods, in lieu of others, often proves the optimal means of avoiding this doctrinal trap.
In short, divorce courts expect a former spouse to maximize income (within reasonable confines). So while a judge cannot mandate a retiree return to the steel mill, for fear or running afoul of a constitutional prohibition on slavery, a court can compute any number of obligations – including alimony and child support – based on the fictitious “highest and best” use of a litigant’s time, rather than focusing on monies actually earned. Thus is borne the concept of “voluntary impoverishment,” a well-intentioned mechanism meant to avoid incentivizing wealthy spouses to retire or take up lighter work on the eve of divorce, so as to minimize post-marital monetary obligations.
Problematically, however, this notion can invite a court to scrutinize whether a player’s declining income during divorce proceedings is, indeed, the result of shoddy cards, or whether it is a more sinister strategic undertaking. Worse, the same doctrine can lay the foundation for a bitter spouse to argue that a poker player would do better honing her or his finesse of numbers and intuition on Wall Street.
Thus there is something of an art to presenting a bettor’s income – both in utilizing deductions and selecting an optimal timeframe from which to derive a representative sample. A lower income will lead to lower alimony and child support obligations (or higher alimony and child support income, if the other spouse is economically dominant), but too petty of an income will invite vocational scrutiny. Still, with the right state laws, and some careful legal maneuvering, it may be possible to utilize the benefits of both extremes, with an attorney arguing different time frames are respectively best suited for the measurement of different attributes and obligations.
Assets: Colored Chips and Free Buffets
Divorce, however, is not a mere measurement of income and obligations – it is also one of the few legal venues outside of bankruptcy where there exists an emphasis on the valuation and monetization of varied assets. Different states regard “marital property” and “community property” in such starkly unique manners that there is little sense in rehashing them herein. But a commonality in poker divorces is the difficulty of pinpointing just what constitutes “property.”
The Internet took viral an image of a Nevada couple dividing a pile of Beanie Babies on a courtroom floor, and the same seemingly vitriol-infused absurdity often underlies spats over the division of other assets. Yet not all assets are readily tangible, and in an era where courts are accustomed to valuing – and parceling off – American Express points, it is a scant stretch to surmise Total Rewards points or comp entitlements are immune from entering the fray of marital dissolution.
Numerous advantage players have grown deft at moving from one hotel suite to another, sheltering in the care of gaming parlors extending comps to valued bettors, and courts, without a proper contextual education, may be rightfully inclined to view housing privileges as not merely an asset of one spouse but, indeed, a hefty asset at that. Similar issues can readily encompass free buffets, comped dinners, a steady stream of show tickets and loyalty points redeemable at will.
Yet an essential distinction divides these perks sharply: with the exception of loyalty points, they are all of a legally illusory character. Comp offers are very much the antithesis of personal property – a casino can revoke them, in most cases, for any reason or no reason at all. Such revocation can be on short notice, generous notice, or no notice at all. Accordingly, these are all rights in which players, by definition, have no legal security. Thus it is of paramount concern that a bettor prevail upon a divorce court to not regard these as inalienable marital assets for which he or she must account to a soon-to-be ex-spouse, but to instead regard them with all the hollowness of a longtime friend’s promise to let a pal stay at his cabin “anytime.”
As for actual rewards points, however, the equation is trickier. Fortunately, the redeemable value of such tallies tends to be minimal. But, depending on the fine print in a given casino’s card program, those may well be actual assets. And since such points are surely non-transferable in most instances, it stands to reason a player will be asked to tender a portion of their value to a divorcing spouse – either in cash or in kind.
Custody: A Narrative of Perception
Custodial spats tend to greatly represent beauty contests, with each presumably-adoring spouse longing for time with little Timmy – either for reason of pure paternal pride or, more sinisterly, as a mechanism of inflicting appreciable emotional detriment on a former partner. Moreover, these are the portions of divorce often least guided by black letter law and most vividly determined in accord with the perceptive whimsy of a judge (or, in some states, a jury). As such, each beauty contestant is well advised to lather on the makeup.
“My wife is a compulsive gambler who spends late nights wallowing in pits of hedonistic sin, banking Timmy’s college education on the turn of a card, associating with scoundrels and hustlers,” goes one doctored spin. “She spends her entire summer in a town literally known as Sin City, misses Timmy’s concert recitals to swindle honorable men in foreign cities, and claims as friends a veritable mob of misfits that specializes in taking Social Security checks off of little old ladies on riverboats.”
It is a harsh indictment, and one not too far removed from the prose oft summoned by those leaving gaming spouses behind. But the contrasting rhetoric, when properly pitched, is just as powerful: “I have a job that allows me to fix my own hours, and I make a point to tuck Timmy in at night before going to work, come home in time to prepare him a wholesome breakfast, and sleep only when he is at school, ensuring I arise in time to pick him up. Timmy can gain appreciable cultural exposure by joining in my travels, foreign and domestic, where I visit top flight hotels. And in my social circle may be found, for Timmy’s benefit, a diverse array of men and women who regularly spend hours on end making small talk, who share meals in the finest of restaurants, and who all take time to better the world by playing in games that support various laudable charities.”
Critical in crafting a custodial analysis is not merely emphasizing the attributes that make gaming such an appealing career, but using them to strategically de-stigmatize the phrase “professional gambler.” Ill-informed courts can too easily conjure images of smoke-filled back rooms; these must be effectively countered with the palpable glamour of the Bellagio, Borgata and the Beau Rivage.
Prenups: Tournament Rules for Life
Finally, it bears mention that with the exception of child support and custody, most states permit nearly all matters matrimonial to be resolved through the preemptive execution of an anti-nuptial agreement – or, more colloquially, a “prenup.” And while few things decimate the buzz of Levitra-fueled romance like a document methodically planning rights and entitlements in the event of a divorce, those with atypical asset bases and income streams (such as poker players) are well-advised to undertake them. The odds of any given lustful union lasting are ever-diminishing, and no matter how certain a soulmate may be, proceeding without a prenup is roughly the mathematical equivalent of drawing to a flush – with your full bank roll on the line.
As with all else herein, prenups should be drafted with the aid of a divorce attorney and a gaming lawyer – normal notions of asset appreciation and income determination simply do not hold up to the life of a professional bettor. But these are increasingly inexpensive documents that, with an ever-diminishing unromantic flair, the value of which is too often understated. If Worm was even remotely right about significant others being the rake “in the poker game of life,” this is one near-certain way to avoid that hefty tax.
Maurice “Mac” VerStandig, Esq. is the managing partner of The VerStandig Law Firm, LLC, where he focusses his practice on counseling professional poker players, sports bettors and advantage players across the United States. He is licensed to practice law in Maryland, Virginia and Florida, as well as in nearly a dozen federal courts, and regularly affiliates with attorneys licensed in numerous other states and jurisdictions. He can be reached at firstname.lastname@example.org.
In this Series
- 1 WSOP Insight: How Gaming Wins and Losses Can Impact Your Tax Obligations
- 2 WSOP Insight: The Risks of Investing in Other Players’ Action
- 3 WSOP Insight: One Tequila, Two Tequila, Three Tequila, All-In
- 4 WSOP Insight: A Poker Player’s Guide to Divorce
- 5 WSOP Insights: The Asset Forfeiture Boogie Monster