The UK Upper tier Tribunal has overturned the decision of the First Tier Tribunal and decided that no value should be attributed to non-neg chips and free bet vouchers for gaming duty purposes given out by casinos.

The law states that gaming duty has to take into account “the value in money or money’s worth of the stakes staked”. The chips in question could only be used to place a bet, and unlike a cash chip, it cannot be cashed or surrendered for goods or services, or assigned for value. The Upper Tier Tribunal ruled that the money’s worth is the amount which is put at risk by the player when staking the stake, ie the real amount of money or money’s worth that is risked in the game, not any notional amount represented by the face value of the stake. An objective assessment of value of the underlying substance of the stake must be made, consistent with the Aspinalls case. In these circumstances, the value was nil . The Tribunal’s view was that any winnings in the form of another non-neg that could only be used to play a game, equally had no deductible value as a prize. Businesses affected should consider making reclaims and may follow this decision.

We await HMRC’s reaction. So far as remote gaming duty is concerned, it was announced in the Budget that HMRC would from August 2017 impose duty on free plays and free spins. Nothing in this decision changes this, as the Government can amend the legislation to expressly attribute a value to free plays for remote gaming duty purposes. Indeed, in the interests of consistency, the Government may consider looking to override by legislation the decision in this case by amending the law to attribute face value for gaming duty purposes.