Consultation on the treatment of “freeplays” in remote gaming duty released

Graham Chase, Tax Partner, CMS

In March we provided an update on the Government’s announcement in Budget 2016 that it would bring the treatment of “free plays” for remote gaming duty purposes in line with the treatment of “free plays” for general betting duty purposes.

Currently the use of “free plays” will not give rise to the receipt of a dutiable stake for remote gaming duty purposes. By contrast, a customer’s use of a “free bet” will give rise to a dutiable stake for general betting duty purposes. Additionally, the award of “bonus credits” to customer accounts may currently give rise to a deduction for remote gaming duty purposes, which deduction is not mirrored for general betting duty purposes. The precise basis for any such deduction is a focus for HMRC as specific comment to this effect is included in the consultation.

The Government has now released a consultation providing further detail on this change and draft legislation. The proposal is that:

  1. “free plays” will be subject to remote gaming duty on the full notional amount of the gaming payment when used by a customer to participate in gaming; and
  2. “free plays” credited to customers’ accounts (such as bonus credits) will not generally be deductible for remote gaming duty purposes.

It is likely that this change will initially result in higher remote gaming duty liabilities for UK-facing remote gaming operators, due to the wide use of free spins and bonus credits by such operators to acquire and retain customers. The rules do not come into effect until 1 August 2017, so there is just under a year for operators to consider its impact and potentially adjust customer incentives.

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