Gambling duties – no news is good news!

Stephen Hignett, Tax Partner, CMS

There’s precious little in the Budget concerning gambling duties.

The way in which machines are taxed is due to change in 2012/13, with the banded licence fee regime of Amusement Machine Licence Duty (AMLD) being abolished and machine takings no longer being subject to standard rated VAT.  Under the new regime – of “Machine Games Duty” – machine takings will be subject to a gross profits tax and will be exempt for VAT purposes (with the related blocking of input VAT recovery being the most contentious issue, since this is what determines what the true cost of the new regime will be).  But we knew all of that already.

The big question re machines is what will be the new rate of MGD.  There are no answers to this question in the Budget.  We are, however, told that a technical consultation on the draft MGD legislation for Finance Bill 2012 is expected to be launched in autumn 2011.  So perhaps we will find out more then?

In the interim, and as usual, the bands of AMLD are to be increased in line with inflation.  Likewise the gross gaming yield bandings for gaming duty (being the duty which applies to bricks and mortar casinos), will also be increased in line with inflation.

“Is that it? “,  I hear you say.  Well,” yes”. 

But the big news is that there isn’t anything else relating to online sportsbooks or casinos …. not yet, at least.  Will the UK government look to change the status quo – that we’ve now had since 1 September 2007 – and introduce a secondary licensing regime with duty arrangments which mirror those adopted by the the French or the Italians?  Or will they perhaps opt for a “place of consumption” duty regime as announced by the Irish?  Well, if they are thinking about either of these (or something else), they’re not letting on just at the moment.

So, if you’re sitting in your deck chair in Gibraltar, sit back, relax, and enjoy the sun – while it’s still shining.

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