Gambling News by House of Odds

Brian and Terry Leblanc were once a couple of average guys, spending their
days washing windows and their nights drinking beer and watching sports on
TV.
In the late 1980s, the brothers won about $90,000 at Toronto's Woodbine race
track and decided to put that money toward more sports betting. Within a few
years, the Leblancs were managing a full-time betting operation from their
home in Aylmer, Que., wagering up to $300,000 a week mostly on games such as
Pro-Line. Their strategy was simple: bet huge amounts on events with
incredibly long odds. Naturally, they lost most of the time, but, when they
won, they won big. They pocketed $1.7-million three times -- on two bets in
1996 and one in 1999 -- and won about $5.5-million from 1996 to 1999. During
that period, they wagered $52-million. It wasn't long before the Canada
Revenue Agency took note. In 2000, the agency sent them a notice of
reassessment for the years 1996 to 1999, saying their gambling was a
business and subject to tax. The case ended up at the Tax Court of Canada
and, last week, Mr. Justice Donald Bowman ruled in favour of the Leblancs.
"It is true, they won but to say they won because they had a system has no
basis in the evidence at all," Judge Bowman said in his ruling.
"They won in spite of having no system. If one is looking for a pattern, it
is that they bet massively and recklessly and in those games where they
could, they bet on long shots. Certainly it meant that if they won they won
big, but the converse is that if they lost, they lost big and, given the
astronomical odds against winning, their chances of losing were far greater
than their chances of winning." The judge said the Leblancs were compulsive
gamblers, but they were not running a business and their winnings were not
taxable. William Vanveen, an Ottawa lawyer who represented the brothers,
said the ruling was an important victory for gamblers everywhere.

"What it boiled down to was that luck is not taxable," Mr. Vanveen said
yesterday.

In order to win its case, he said the CRA had to prove that the men
developed a system to minimize their risk, something like a pool shark who
practises by day and then takes on unsuspecting drunks by night.

"The mistake CRA made was they just looked at the volume [of betting] and
said all this volume amounts to a business," Mr. Vanveen said. "These
[lotteries] are advertised and are accepted to be tax free. [The brothers]
have a big win, they don't work after that, so what's the problem?"

The lawyer representing CRA was unavailable for comment. The CRA could still
appeal the ruling.

As Judge Bowman noted, the Leblancs led unusual lives.

They grew up in the Toronto area and had little more than high-school
education when they joined their father's window-washing business in the
1980s. After winning money on the track, they decided to jump into Pro-Line,
which was launched in 1992. They lost about $10,000 in their first year, but
soon scored big with two $1.7-million wins in January and February of 1996.
By the mid-1990s, they moved to Aylmer, near Ottawa, so they could play both
Ontario and Quebec lotteries. They kept their lives simple, driving old cars
and eschewing flashy jewellery.

"They spent their time playing lottery games or watching sports on
television," the judge noted. "They also played Ping Pong and golf and sat
around the house drinking beer and eating pizza."

Not everything went well. Around 1996, Terry Leblanc fell in love with a
stripper named Josée Dubreuil and showered her with gifts, including an $850
engagement ring, $2,000 for breast implants and $14,000 in cash, according
to court records. The relationship ended after Ms. Dubreuil stole $124,000
worth of winning lottery tickets from a jar the Leblancs used to store
winning bets (the theft prompted them to buy a safe). Ms. Dubreuil was later
convicted and given an 18-month suspended sentence.

In 2000, they also got into a spat with dog-racing regulators in Australia
who withheld nearly $200,000 the brothers won via an online bet. The
Australians alleged manipulation but eventually backed down and gave the
Leblancs their winnings.

Brian, now 35, and Terry, 41, were not available for comment yesterday.
According to Mr. Vanveen, Terry still lives in Canada while Brian has moved
to Britain.

Both are still gambling, he said. "Not like they were before."