Several major UK gaming operators are using the power of technology to reduce their tax liabilities, according to the Evening Standard newspaper. The publication conducted an investigation into the practice, which involves beaming live video feeds of actual roulette wheels at casinos outside the capital to electronic slot machines in London. The smaller, less profitable revenues, sometimes located hundreds of miles away, are taxed at a lower rate. Even though the punters place their bets in London, the casinos can legally pay the lower tax.
The operators include Rank, which has begun a trial run of the practice in three London casinos and two outside the city, and Aspers, which has beamed video of live wheels in Newcastle to its Westfield’s Stratford City complex in London. Aspers reportedly saved up to £850,000 (US$1.2 million) from one casino last year, about 5 percent of Stratford’s total tax bill. Both operators received tax advice from EY (formerly Ernst & Young) before implementing the live feeds, the Standard reported.
Genting, which operates more than 40 casinos in the UK, also beams images of a live wheel from one casino to another, but pays the gaming duty where bets are placed, a company spokeswoman said.
Labor Chancellor John McDonnell told the Bureau that Chancellor of the Exchequer George Osborne “needs to crack down on this urgently.”
Documents show that EY, Rank’s audit and tax adviser, was involved in the “project.” EY declined to comment on the matter, saying only, “Clients seek our advice on a wide range of issues.”
The strategy may leave some councils short when it comes to their revenue-sharing agreements. For example, Aspers confirmed it pays Newham Council “the greater of £1 million per year or a 3 percent share of the casino’s gaming revenues with the possibility of a further 2 percent share in certain circumstances.” With Aspers now booking revenues based on the Newcastle tax rate, Newham Council said it has “arranged to meet with Aspers to discuss this in the near future.”
Aspers responded by saying it “has always paid all duties and taxes legally required of it. It has never taken part in any deliberate scheme to avoid gaming duties. Any marginal and indirect tax benefit is incidental to the introduction of the live wheels to widen customer choice and satisfaction.”
