Bookmakers could be set for substantial FOBT payout

Fixed Odds Betting Terminals (FOBTs) have returned to the news once again, after a first-tier tribunal found in the favour of bookmakers, which could potentially see them rake in a billion pounds in paid VAT from 2005 to 2013.

The original decision by the tribunal deemed that Category B2 games should have been VAT exempt from 2005 to 2013, after the case was originally put forward by British bookmaker Betfred.

The operator emphasised that the category B2 games it was paying heightened VAT on, were available VAT free through casinos and online operators. Additionally, the amount that was paid by Betfred and other retail operators on the games in question, gradually rose through the aforementioned period, from  15 per cent in 2005 to eventually reaching 25 per cent in 2013.

Betfred managing director Mark Stebbings stated: “We welcome the decision regarding the historical tax treatment of fixed odds betting terminals which pre-dates the introduction of machine games duty in February 2013. It does not concern Betfred’s ongoing tax liabilities.”

Nonetheless, next development is seemingly crucial with history appearing to suggest that the HMRC will now appeal the decision, especially given the sizable bill that Betfred are pushing for.

The decision of the HMRC may be seen as a blow to trade body BACTA, who have argued the case that the implementation of a £2 maximum stake should be accelerated. Something that may well take a back seat for the government as it now prioritises appealing the case made by Betfred.

The group’s Chief executive John White commented: “The delay between the announcement of the £2 stake and its implementation is clearly too long. There is no technical justification for this and it is putting vulnerable people at risk. The government has made the right decision, and we now urge it to speed up the process.”