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
television. 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 Wednesday. 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. 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.