Published: 06 May 2016 by Richard Bradley
This case involved operators of Spot the Ball (STB) Competitions and whether their activities could be classed as a game of chance under the Gaming Act 1968 in order to claim VAT exempt status under the Finance Act 1972, the Value Added tax Act 1983 and the Value added Tax Act 1994.
The operators originally sought to recover VAT paid between 1979 and 2006 in the region of £70 million.
The STB competitions in question invited players to place a cross where he or she thought the ball was located on a player coupon, which was then returned to the operator. The winners of the competition would be decided not by reference to the actual position of the ball in the original photograph, but by reference to the opinion of a panel of experts.
The competition was presented to the public as involving skill and judgment and also involving elements of chance.
The First Tier tribunal found that however a skilful a competitor might be and even if superlative skill was applied that in the circumstances a player could only approximate the ball’s location and that accordingly the Spot the Ball was indeed a game of chance and therefore exempt from VAT.
HMRC appealed that decision and the Upper Tribunal found that the First Tier Tribunal had erred in its findings. A game of chance required some sort of engagement with other players and therefore the STB competition, where no such interaction occurred, could not be classed as a game and therefore the VAT exemption would not apply.
The matter has finally reached the Court of Appeal which has held that the First Tier Tribunal did not err in its decision and that ‘Spot the Ball’ in these circumstances was indeed a game ‘of chance’.
So where does this leave us?
For further information on gambling contact solicitor Richard Bradley on 0115 953 8500.
Further Gambling Regulation Consultations Published
The Gambling Commission launches new set of consultations on proposals from the Gambling Act Review White Paper
Safer Gambling week 2023
Poppleston Allen are proud supporters of Safer Gambling week (13th – 19th November 2023)
Analysis of the Gambling Commission’s consultation on changes to the LCCP, RTS and regulatory panel arrangements
This includes the somewhat controversial financial vulnerability check requirements, Remote Gambling and Software Technical Standards, and arrangements for Regulatory Panels.
Can’t find what you’re looking for?