Canadians Withdrawing from Draftkings - withholding tax

[mbice]

About a month ago I learned about Draftkings from Dobber advertising the site so I decided to try it out. I managed to place fairly high in a few tournaments. However, when I went to withdraw some winnings today I was notified that they withhold 30% of winnings from Canadians. Any tax accountants or Canadian Draftking players out there familiar with this situation? Would have been nice if there was a disclaimer stating this (there probably is; just wish they made it more visible when signing up).

[JagrBomb]

i used to use draftkings a lot but then i believe it was pengwin who mentioned that if you win you do get taxed since it's classified as an income (didn't really think of this haha) so i stopped playing, which is good since i've lost more than i've won haha. sucks that i can't cant a tax return on my "losings" lol

[chuckcouples]

In Canada, income from hobbies and lotteries are not taxable, however, in the US they are. This is why Draftkings withholds your money when you cash out. You may be able to get some of that withholdings back. Here is a link to some useful information.

http://www.taxtips.ca/personaltax/usgamblingtaxes.htm

[dooley89]

I chose the option to receive a check from Draftkings and never lost 30%, is this new or something?

[2014olympicgold]

It’s like winning anything on a trip to Vegas technically. If it’s a fair bit you’re checking out >$500 I’d go through the re-claiming taxed winnings steps. I’d assume it’s the same as if you won money in Vegas as it is winning money through an American website.

[Dutch]

I believe everything over $1199 is due for tax withholding. At least in Vegas it is,

Not sure about online, but I assume it's the same thing.

You can definitely get it back, but you would need to talk to your accountant.

[mbice]

I requested a check too. This is what they emailed me when I requested a withdrawal:

"We have received your withdrawal request, and wanted to inform you that since you are resident of Canada, and have net positive cash flow, as the Withholding Agent, as defined by IRS tax regulations, DraftKings must withhold 30% of the requested amount. However, as a resident of Canada, you do have the opportunity to avoid this withholding by claiming benefit under Article XXII of the treaty between the Unites States of America and Canada. In order to take advantage of this treaty, and receive all of the requested withdrawal amount, you must provide DraftKings, with all the required information on the attached IRS form W-8BEN. This form will not be considered complete without a US-issued SSN, ITIN, or Foreign TIN on line 6. A Canadian SIN is not a sufficient number to complete the form."

I don't have a US-issued SSN, ITIN, or Foreign TIN. It's pretty much impossible to profit from this site when you're losing 10% rake and then 30% withholding tax. I've been informed I can recover this withholding tax if I have other US gambling losses to offset it but I don't have any losses as this is the only gambling I've done.

Dobber - you should put up a disclaimer on the Saturday Draftking articles notifying Canadian users about withholding tax.

[2014olympicgold]

Wow, winning $100 is only a take home of $60. Ouch. Wouldn’t be worth it in my eyes.

[dooley89]

Literally have never seen anything about 30% being held - was this implemented in the last couple of weeks?


This is what I received last time I cashed out:

Your request for a Withdrawal in the amount of $250.00 has been received and your payment is pending processing. Your confirmation number is:

Then a day later:

Your $250.00 DraftKings Withdrawal has been processed. Please check your My Account page for details of how your request was processed.
Your confirmation number is:
Also note that our policy on withdrawals is to first refund you back through your original payment source, and then to transfer the additional balance owed to you via PayPal or Check as requested. PayPal refunds will take 3-5 business days to show in your account. Credit Card refunds will take 2-7 business days.

How your withdrawal was fulfilled:
- Refunded 1 transactions totaling $25.00 via PayPal.

- Direct Pay $225.00 via Check to:

[theIceWookie]

In Canada, income from hobbies and lotteries are not taxable, however, in the US they are. This is why Draftkings withholds your money when you cash out. You may be able to get some of that withholdings back. Here is a link to some useful information.

http://www.taxtips.ca/personaltax/usgamblingtaxes.htm

Came here to post this haha. Nice.

[Mr. Guru]

Dobber hasn't responded yet?

[Dobber]

I requested a check too. This is what they emailed me when I requested a withdrawal:

"We have received your withdrawal request, and wanted to inform you that since you are resident of Canada, and have net positive cash flow, as the Withholding Agent, as defined by IRS tax regulations, DraftKings must withhold 30% of the requested amount. However, as a resident of Canada, you do have the opportunity to avoid this withholding by claiming benefit under Article XXII of the treaty between the Unites States of America and Canada. In order to take advantage of this treaty, and receive all of the requested withdrawal amount, you must provide DraftKings, with all the required information on the attached IRS form W-8BEN. This form will not be considered complete without a US-issued SSN, ITIN, or Foreign TIN on line 6. A Canadian SIN is not a sufficient number to complete the form."

I don't have a US-issued SSN, ITIN, or Foreign TIN. It's pretty much impossible to profit from this site when you're losing 10% rake and then 30% withholding tax. I've been informed I can recover this withholding tax if I have other US gambling losses to offset it but I don't have any losses as this is the only gambling I've done.

Dobber - you should put up a disclaimer on the Saturday Draftking articles notifying Canadian users about withholding tax.

I didn't know about this, thanks for bringing it to my attention. I knew about this for Vegas trips, obviously, but not for this. However, the Saturday DK articles are for tournaments in which the highest prize is around $500 so nothing is withheld. But as far as I know, you can recover every cent of this back. There are other W-8 forms besides the W-8BEN. I will talk to them, but keep pushing back on this - you'll get it.

Also - congrats on winning so much! Man, that's impressive

[Dobber]

Literally have never seen anything about 30% being held - was this implemented in the last couple of weeks?


This is what I received last time I cashed out:

Your request for a Withdrawal in the amount of $250.00 has been received and your payment is pending processing. Your confirmation number is:

Then a day later:

Your $250.00 DraftKings Withdrawal has been processed. Please check your My Account page for details of how your request was processed.
Your confirmation number is:
Also note that our policy on withdrawals is to first refund you back through your original payment source, and then to transfer the additional balance owed to you via PayPal or Check as requested. PayPal refunds will take 3-5 business days to show in your account. Credit Card refunds will take 2-7 business days.

How your withdrawal was fulfilled:
- Refunded 1 transactions totaling $25.00 via PayPal.

- Direct Pay $225.00 via Check to:

Ah, so if this is new then I don't feel bad for lack of disclaimer

[Dobber]

I emailed my Draft Kings contacts. I'll keep you apprised

[mbice]

Thanks for looking into this Dobber.