Evans v Federal Commissioner of Taxation (1989) 89 ATC 4540

The Commissioner alleged the taxpayer was a professional gambler for the income tax years of 1977 to 1981 and assessed his winning on an asset betterment basis.
Evans received amended assessments pursuant to s 167 of the Income Tax Assessment Act (Cth) for 1977 to 1979.
The 1977 assessment was six years after the tax became payable.
In Evans’ income tax returns for the 1977 and 1978 tax years he declared his interest in horse racing and greyhound racing as a hobby and an estimate of his winnings.
In October 1978, Evans entered into a partnership agreement with a friend to conduct a wallpaper shop. Evans provided the capital and his friend managed the shop. In December 1979 he purchased a hotel and was actively involved in running the business. Throughout this period he owned a number of racehorses. None of them were successful and were sold at a loss.

A business should have elements of repetition, permanence, continuity and system.
The test of whether a business of gambling, or for that matter any business, is carried on will be largely objective, determined by reference to the nature and extent of the activities involved.
For a punter to be a professional gambler, his betting activities must be conducted as as to get the most favourable odds obtainable.
Volume and size of punting are not determinative.
Evans was not a professional gambler because it lacked the element of system or organisation which is characteristic of a business. There was no pre-formulated plan. Did not maintain any office or employ staff

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