£500 Million VAT Refund for UK Gambling Operations

The Rank Group wins an appeal in the UK high courts earning bookmakers a £500 Million VAT Refund! Find out which brands were reimbursed! (Photo by Markus Winkler on Unsplash)

The Fixed Odds betting terminal story in the UK never seems to cease, and in the past, it was usually bad news each time the subject arose. However, this time gambling companies are on the positive side of the report as the government announces a total of £500 million in VAT refunds for UK gambling operations!

Refunds were issued to Entain which operates both Coral and Ladbrokes. Also, William Hill, Paddy Power Betfred, and the Rank Group all received payouts thanks to a court appeal initiated by Rank Group; the owners of Grosvenor Casinos and Mecca Bingo. In the tax tribunal, the company argued that fixed-odds betting terminals (FOBTs) are akin to roulette table games and as such have been overtaxed between 2013 and 2018. The high court agreed with the case facts and thus ordered the tax be paid back as per the law.

Original FOBTs Saga Explained

In 2019, the government ordered all FOBTs, which are self-service betting kiosks, to limit the maximum stake UK punters could make to a meagre £2.00. The move has since severely affected most high street bookmakers bottom lines, who pleaded and lobbied to stop the restriction from being put in place. However, research showed that British gamblers lost £1.8 billion playing the FOBTs in 2016. The saga regarding the max bet limitation went on and even became one of the Labour government’s election promises.

One of the reasons this became big news is because UK gamblers had lost £13.8 billion betting on sports, yet the government decided to target FOBTs. Per day the losses on these machines amounted to £5 million according to one source. However, confused bookmakers were mystified as to why the FOBTs were being targeted as the overall losses only accounted for 13.04% of all sports betting losses. In the end, the government labelled the machines as a plight to society and slapped on the £2.00 max bet limitation.

Revenues & Customs + Operators Confirm Refund Paid in Full

Across the board, both the sports betting operators and the revenues and customs department appear to have settled the overcharged tax already. The refunds could not have come at a better time as retail bookmakers and land-based casinos are only just opening again after a year of closures.

Good news at last: Finally, the bookies do have some positives coming out of the entire FOBTs narrative as the government agreed that taxes paid on these machines were too high!