Sportsbooks and casinos in the U.K. could be in for a windfall after they won a £1 billion (US$1.2 billion) legal battle over tax paid on fixed-odds betting terminals. William Hill and GVC are expected to reclaim up to £350 million from Her Majesty’s Revenue & Customs.
A ruling by the upper tax tribunal last month found that gambling companies had been overcharged value added tax for around eight years.
In a statement, William Hill said the bookmaker can claim a refund worth between £125 million and £150 million.
GVC, the Ladbrokes Coral owner, had said in the past it could receive £200 million from the decision. In a statement, the company said, “GVC Holdings PLC has learned that the U.K. tax authority, Her Majesty’s Revenue & Customs, has taken the decision not to appeal the ruling.”
The refund comes in a long-running case brought by bookmaker Betfred and the Mecca Bingo owner, Rank, over tax payments between 2005 and 2013. The High Court sided with the betting operators on the grounds that HMRC had made no distinction with regards to the ‘supply of games’ until it updated its tax policy in 2013, according to SBCNews. In other words, the machines charged the tax were similar to other games like casino roulette wheels, which are exempt from the sales tax.
Look for other gambling companies to file claims at a time when government coffers have suffered due to the Covid-19 response. Then again, the refund comes at a time when bookmakers have suffered as a result of a lockdown and suspension of sports to wager on.
The irony is the once lucrative machines in question lost luster after a public outcry over their links to gambling addiction forced the government to cut back the maximum amount that could be played from £100 to £2.
