The U.S. Tax Court was not bluffing when it ruled that tournament poker is gambling, not a sport, and thus not exempt from the Section 165(d) limitations of the tax code.

In a case brought by George and Gloria Tschetschot of Cedar Rapids, Iowa, the couple argued that Gloria’s professional tournament poker playing was not gambling, and thus was not subject to limitations on losses from gambling.

The Internal Revenue Service had cited a deficiency in the couples’ joint federal income tax return for 2000 of just over $10,000, and assessed an accuracy-related penalty for the understatement of just over $2,014.

During the trial, the Tschetschots conceded that George was not a professional gambler, but said that Gloria’s poker playing should not be classified as gambling due to the specific rules of the particular game of poker.

Unlike “live-action” poker, poker tournament participants cannot exit the game by cashing out partway through the tournament; the events are played until there is one player left with all of the chips and can last anywhere from days to weeks. The Tschetschots expanded on that point, providing a number of reasons for why tournament poker should be classified as "entertainment and professional sports" and not a wagering activity -- meaning that Gloria’s net losses (approximately $30,000) should be treated the same as those of any other professional sport participants.

But in its decision, the court noted that, similar to live-action poker, a player’s tournament success depends on a combination of both luck and skill -- a point cited by a British court that recently found poker to be a game of chance. And it was there that country singer Kenny Rogers found himself entered into record.

“A player might have a decent hand, but as Kenny Rogers tells us in ‘The Gambler,’ he or she would still have to, ‘know when to hold ‘em, know when to fold ‘em, know when to walk away and know when to run,’ to actually be a success,” the court wrote in its response.