News: Mixed News on Taxation and Test Purchasing
- Date: 21/12/2009
- Author/Solicitor: Nick Arron
The Gambling Commissions rolling program of nationwide of underage test purchasing visits have continued. Of 160 betting shops visited recently by the Commission, 35% allowed a person under 18 years of age to place a bet at the counter. This is a significant improvement on the figures from May but leaves room for improvement. In addition to visiting premises run by the major betting operators, the recent exercise included visits to some small and medium sized operators. The program of test purchasing will continue.
Full details can be found on the Gambling Commission's website.
Local Authorities and the Police also have the power to conduct underage test purchasing operations. Recently in Sutton the Police conducted operations by under 18 year old Police Cadets. The Police targeted alcohol licensed premises, a number of which were handed on the spot £80 fixed penalty notices, and two betting shop premises which both permitted the Police Cadets to play on the gaming machines. The gambling premises were reported to the Council's Licensing Department and no further action has been taken.
This recent exercise followed a number of AGC underage test purchase failures earlier this year. The Sutton Council wrote to the premises asking them to take all reasonable steps to prevent further offences from being committed. They decided to review the licences but the option of regulatory or criminal sanctions remain if further test purchasing failures occur.
On a more positive note you may have seen the Governments Pre-Budget Report which included good news regarding gambling taxation. The Government announced that they will reduce the rate of bingo GPT to 20% for April next year. This presents a welcome turnaround by the Government. The announcement had been widely applauded by the industry, particularly in these difficult economic times, although many, including the Bingo Association are still campaigning for a lower rate for bingo.
No decision was made by the Government on the recent consultation on gaming machine taxation. The industry awaits developments on whether the Government will move to gross profits tax and away from AMLD - a change which will have a significant impact. An announcement is expected shortly.
Finally, on taxation her Majesty's revenue and customs and the Gambling Commission have recently issued a joint statement on amusement machines which offer games designed to look like recognised games of chance. The Gambling Act 2005 at Section 6 defines games presented as games of chance are gaming and therefore gambling.
HM Revenue Customs and the Gambling Commission state that "Games presented as involving an element of chance, will be subject to Amusement Machine Licence Duty, unless they fall within one of the exemptions for small stakes and prizes and must have the correct permissions under the Gambling Act 2005. Furthermore, those who manufacture supply or maintain these machines must have an Operating Licence from the Gambling Commission".
In considering whether the games on a machine are being presented as involving an element of chance, the Authorities will look at, not only the game title, the way the game is described, but also how the game itself is presented to the player. Changing the name alone will not avoid AMLD or the requirement for a licence or permit. Full details of the statement can be found on the HM Revenue Customs website.
The majority of responsible operators accurately describe their games, for instance. BACTA members follow a code of practice which includes the requirement that SWP gaming machines must not be presented as a game of chance as defined by Section 6 of the Gambling Act 2005.
For more information please contact Nick Arron
