Five stories that built Billy Baxter’s legacy

When it comes to legends of poker, Billy Baxter is certainly not spoken of as much as he should be. Not only has he accumulated 7 WSOP bracelets and been cashing at the WSOP for over forty years, but he also paid Stu Ungars 1997 Main Event entry because he was having a good day at the tables and felt sorry for him.

This gesture would lead to one of the greatest moments in WSOP history when Ungar won his third title. These facts are reasonably well known however, so allow us to bring you a few lesser known stories from the life of Billy Baxter.

#1 – The tax war he won for poker players

Billy Baxter – Photo credit:

Back in the 1980’s, the Inland Revenue Service (IRS) decided to make some changes to taxes in the US. They decided to impose a 70% tax on all income which they deemed to be “unearned income”. This would apply to interest paid on money already owned but would also apply to poker players. This is because although professional athletes were exempt from the new tax, professional poker players were not considered professional athletes.

Never in its history had the IRS lost a case of this nature, and so when Baxter decided to sue them, they gladly went to court to fight their case. Baxter’s case was eloquently put to the judge, with comparisons being made to golfer Jack Nicklaus who was exempt, despite spending his working days interrupting a pleasant walk with hitting a small white ball. According to Baxter, sitting in a casino grinding out a profit is equally demanding and so those who earn money playing professional poker should also be exempt. Remarkably, the judge ruled in his favour. The IRS took the case to a higher court and lost again.

Finally, the IRS decided they would back down a little and offered Baxter a deal which would have helped his own financial situation and allowed him to stop worrying about ongoing legal expenses which were stacking up. Baxter refused. Indignantly, the IRS went to the Supreme Court, who finally ruled in Baxter’s favour, settling the matter permanently. At great personal cost, Billy Baxter had protected the income of poker players across America.

#2 – Winning a gambling club and going to prison in the early years

Baxter has always said that he was a sports betting man long before he was a poker player. He began his gambling life by shooting pool for quarters, before moving up to bigger wagers and eventually making $5,000 for himself by the age of 16. This was a huge amount of money for a 16-year-old in 1956. Soon after that he discovered that people were playing a big 2-7 limit game in a club in Atlanta and he decided to join in, losing his pool winnings at first. After repeatedly going back to hustle more pool before coming back to play 2-7 again, Baxter finally started winning.

Speaking about the 2-7 game Baxter said, “each big bet was $500 and there was this bootlegger who would come in and he had a fruit jar full of $500 bills, back when those where still in circulation”. Baxter had to learn his craft fast, and he did just that. Having expanded his bankroll at those early games he learned Gin Rummy and soon moved on to a club in Georgia where he beat the owner out of $40,000 playing that game. The owner cut Baxter a deal – allow him to keep his $40,000 in exchange for half of his business. Over the following year Baxter continued to win money from the owner until he offered up the other half of the club to Baxter too.

Billy Baxter Photo WPT
Photo WPT

Things were going well for a time, but that all changed when a new sheriff arrived in town and told Baxter he would have to stop running his gambling business. Baxter grudgingly agreed to shut the club down, but then chose to reopen it just for the weekend of the golf Masters tournament. Word reached the ear of the Georgia Bureau of Investigation that Baxter had reopened, and they broke down the doors and arrested him for felony bookmaking. The story had a somewhat happy ending however, as Baxter made a prop bet with Jack Binion and Doyle Brunson that he could lose 40 pounds in weight while serving his one-year sentence. Baxter stepped onto the scales on his release day and won the bet.

#3 – The lord of lowball

Some people will already know that Billy Baxter has 7 WSOP bracelets, but few know that all of them were won in Lowball events. His first bracelet in 1975 was in the $5K NL 2-7 Draw, and this was followed by 2nd in the $10K NL 2-7 Draw in 1977 and 1st place in the same event in 1978. Baxter’s next three cashes were all 1st places and all in Lowball events, including two more bracelets, both in 1982. His huge cashes in Lowball events continued throughout the 1980’s into the early 1990’s. All of Baxter’s first 27 recorded cashes were all in Lowball tournaments. 8 of them were 1st place finishes which included 6 WSOP bracelets, and 9 of them were 2nd places, with 5 finishes of 3rd place mixed in too. That’s 22 top 3 finishes in Lowball events in the space of 27 cashes.

Baxter claimed in an interview in the mid 2000’s that his ability to bluff and read bluffs was what set him apart in Lowball – a game which many say is the purest form of poker. During the interview, Baxter said, “There is not nearly as much bluffing in Hold’em. But in 2-7, you only have one draw. That lessens the likelihood of a guy improving his hand. So, you have to bluff — and you have to read bluffs”.

Billy Baxter – Photo

#4 – The Main Event and 1990

While everyone knows about Baxter’s staking of Stu Ungar in 1997, not many people know that he also staked him in 1990. At the end of the first day Ungar had run his 10,000 stack up to 70,000 and had a commanding chiplead. He was then hospitalised after taking drugs that night and the following day he was unable to play his stack, which was blinded off. Baxter says that Ungar never apologised or offered a refund, and after that day he swore he wouldn’t stake Ungar again.

Seven years later, in an act of kindness, Baxter finally broke that vow and paid Ungar’s buy in for the 1997 event. The rest, as they say, is history. Few people know that Baxter had no interest in bracelets or the Main Event himself, and the first year he ever played the Main Event himself was that same year – 1997. Baxter finished 22nd place.

#5 – Hustling a drug trafficker

Playing high stakes poker and golf meant players like Baxter sometimes encountered wealthy individuals who weren’t great players, but who were making enough money from shady enterprises that they didn’t mind losing a little. One such player was Jimmy Chagra. After a bad day gambling against Baxter on the golf course, the drug trafficker invited him back to house to collect the $365,000 he was owed.

Chagra’s mansion was patrolled by armed guards and he had a pool table in the living room, which he invited Baxter to join him at for a few games. Chagra suggested $20,000 per game and hoped to get even, seemingly unaware that Baxter began his gambling life as a pool hustler. Soon enough, Chagra was another $200,000 in the hole and two of guards came in to see if their boss needed anything.

Specifically, they asked what he wanted them to do with Baxter. Chagra replied, “If I don’t start winning some games soon, I don’t know what’s going to happen”.

Baxter wisely lost the next ten games and slipped into the conversation the fact that his wife knew where he was. Having allowed Chagra to get even at pool, Baxter made his excuses and hoped he would be allowed to leave with his golf money. “Get this guy his fucking money” said Chagra, and guards duly disappeared before returning with two shopping bags full of cash. Breathing a sigh of relief, Baxter made his way home.

Article by Craig Bradshw