Chapter 7 - Business Income?

[Throwaway92]

I am under the impression while doing research that many lawyers are of the opinion/argument that debt taken out related to gambling can/should be counted as non-consumer debt because there was "intent to make a profit"

I do not pass the means test to file for Chapter 7 due to being well over the median income. And as far as the gambling is concerned it is hard to discern what is professional gambling and what is casual. I'd like to consider my gambling to be of an occupational nature due to the amount of money won/lost and the frequency and time put into gambling.

My winnings are over 500k for 2020 (net loss of course). Do I have any room to argue that this is debt related to business dealings (non consumer?)

This is just a gist of the situation and I can give more detail if needed. Any help or opinions are appreciated!

[justbroke]

If you're a professional gambler, then it is certainly non-consumer debt since you would be in the business of gambling. At least that is how I have read the many opinions on the topic. No different than a day trader who does this for a living. I even equate it to the "gig" worker who works "full-time" for Lyft or Uber. But that gig-worker concept is entirely my construct based on the recent PUA (Pandemic Unemployment Assistance) rules.

Of course you have room to argue if you can articulate that it is your primary source of income and that you did it regularly. Simply winning $500K doesn't imply that you are engaged in gambling as a source of income as you could have merely been highly lucky a few times at the casino. (That's me playing Trustee's... I mean devil's advocate.)

I'm just poking at it and it may not even matter. The fact will rest on whether you can defend that this is a non-consumer debt and not simply for your personal enjoyment or amusement. As we all know, there are many professional gamblers out there. I met two, one of them a world series of poker championship player who gave me pointers. But as a professional player, he told me that he was at the casino in the poker room nearly every day. He came and played the Ultimate Texas Hold-em once in a while as he waited for a new poker game/table. That's where we met, the Texas Hold-em, in the City of Lost Wages. He said that he made a good living.

Sigh, wish I never ever sat at my first 3-card poker table... ever. Alas, I digress.

I don't particularly need any more detail. It will likely come down to the attorney and their experience with these things. If your play is regular and for profit I'm sure you could argue that it is non-consumer debt. I just don't know any caselaw related to this at all. I only found one case, from New York which said that is was consumer debt.

[Throwaway92]

If you're a professional gambler, then it is certainly non-consumer debt since you would be in the business of gambling. At least that is how I have read the many opinions on the topic. No different than a day trader who does this for a living. I even equate it to the "gig" worker who works "full-time" for Lyft or Uber. But that gig-worker concept is entirely my construct based on the recent PUA (Pandemic Unemployment Assistance) rules.

Of course you have room to argue if you can articulate that it is your primary source of income and that you did it regularly. Simply winning $500K doesn't imply that you are engaged in gambling as a source of income as you could have merely been highly lucky a few times at the casino. (That's me playing Trustee's... I mean devil's advocate.)

I'm just poking at it and it may not even matter. The fact will rest on whether you can defend that this is a non-consumer debt and not simply for your personal enjoyment or amusement. As we all know, there are many professional gamblers out there. I met two, one of them a world series of poker championship player who gave me pointers. But as a professional player, he told me that he was at the casino in the poker room nearly every day. He came and played the Ultimate Texas Hold-em once in a while as he waited for a new poker game/table. That's where we met, the Texas Hold-em, in the City of Lost Wages. He said that he made a good living.

Sigh, wish I never ever sat at my first 3-card poker table... ever. Alas, I digress.

I don't particularly need any more detail. It will likely come down to the attorney and their experience with these things. If your play is regular and for profit I'm sure you could argue that it is non-consumer debt. I just don't know any caselaw related to this at all. I only found one case, from New York which said that is was consumer debt.

Thanks justbroke . I have records for hundreds of wagers/transactions (if not thousands). It really ramped up when I was laid off from my full time job at the end of October and was literally doing gambling as my "full time" job. I have spoken to several lawyers but not many have experience with gambling in a chapter 13, let alone this unique circumstance of considering it non-consumer in a Chapter 7. Also, do you have a link to the NY case you referenced?

[justbroke]

Please don't shoot the messenger...

Trump Plaza Assoc. v. Poskanzer, 143 B.R. 991 (Bankr. D. N.J. 1992). Holding that gambling on eve of bankruptcy is a "luxury" good.

In re Vianese, 192 B.R. 61, 68 (Bankr. N.D. N.Y. 1996). Finding that [this] Court in a previous decision rendered in connection with this case concluded that gambling debts are consumer debts. See In re Vianese, Case No. 95-60060, Adv.Pro. No. 95-70066, slip op. at 9 (Bankr.N.D.N.Y. November 3, 1995).

See also... the following two are from the National Association of Chapter Thirteen Trustees (NACTT). (I don't think they are truly related to classifying gambling debt as non-consumer, but they were listed in the NACTT means test review under 'Gambling, and Speculative ‘Investments’.

In re Baum, 386 B.R. 649 (Bankr. N.D. Ohio 2008) (debtor had $40,000 in gambling debts and court found that her debts were primarily consumer debts – but there was no breakdown of her other debts in the decision).

Lind-Waldock & Co. v. Morehead, 1 Fed. Appx. 104 (4th Cir. 2001)("The Moreheads incurred the debt while speculating in the futures market. The debt is therefore not a consumer debt.").

(Source: National Association of Chapter Thirteen Trustees (NACTT) -- http://considerchapter13.org/wp-cont...nsTest_ALL.pdf)

[flashoflight]

If you get treatment, an argument can be made that you were addicted at the time and deluded into believing you were a professional gambler who could make a profit and truly intended to pay your business debt. This could help overcome the objection that everyone knows the house always wins and there is no such thing as a professional gambler outside of WSOP level poker players and card counters. Professional slot machine player or professional craps player? Probably not. I hope your gambling was exclusively at blackjack or table poker and not the slots.

[Throwaway92]

flashoflight primarily sports book. Spoken to a couple of lawyers who do believe I have an argument to make as business income based on the amount of wagers, amount won, amount lost, frequency, commitment etc. we’ll see where things lead....