British bookmakers have won a battle with the UK’s Revenue and Customs over the VAT treatment of fixed odds betting terminals (FOBTs).
A ruling by the First-tier Tribunal this week said that for most games on a terminal - including slots and roulette games - treating the machines differently for VAT purposes was a breach of the principle of EC law that demanded fiscal neutrality.
It may mean as a result that considerable tax repayments could be forthcoming for bookmakers. In a test case a bookie said that paying VAT on net winnings from FOBTs had been paid at standard rate. But games played online or in casinos were exempt, so for a period between 2005 and 2013 the bookie should claim back his VAT.
According to the FTT roulette, slots, virtual games and card games all fell into this fiscal neutrality principle. During the period under review, the gross win for FOBTs in the UK could have exceeded over £8bn. An appeal may happen, but if that fails then the UK Treasury would take a hit.
