The Upper Tribunal (UT) has considered the same picture scrutinised by the First-tier Tribunal (FTT) in March 2013, but has placed its metaphorical “x” in a different location, and concluded that “Spot the Ball” (STB) is not a game of chance, and so is liable to VAT.


As readers may be aware, in STB, a photograph of a football match is edited to remove the ball. The edited photograph, which will include the players and some part of the original background, is published on a printed coupon. Participants pay to submit a coupon with a number of crosses placed on it by them, each attempting to identify the most likely location for the centre of the missing football. Cash or other prizes are awarded to the participants who have placed their crosses closest to the correct position.

In the panel version of STB, instead of the participants’ efforts being compared to the actual location of the football, a panel of “football experts” carries out the same exercise. The “correct” position is that chosen by the panel.

Since 1978, the operators of STB activities have been regulated and taxed as if they ran competitions for which entrants paid a fee and in which there were winning entrants who were awarded prizes.

In March 2009, the operators said that they were in fact offering “games of chance” in which players put up money and were sometimes lucky enough to win.

Article 13 B(f) of the Sixth Directive (77/388), provided for an exemption from VAT for:

“Betting, lotteries and other forms of gambling, subject to conditions and limitations laid down by each member state”.

This part of the Directive was implemented in Group 4 of Schedule 5 to the Finance Act 1972, which exempted from VAT:

“The provision of any facilities for the placing of bets or the playing of any games of chance [and] the granting of a right to take part in a lottery.”

The notes to Group 4 explained that “game of chance” had the same meaning as in the Gaming Act 1968. Section 52(2) of that Act provided:

“… “game of chance” does not include any athletic game or sport, but, with that exception, and subject to subsection (6) of this section, includes a game of chance and skill combined and a pretended game of chance or of chance and skill combined …”.

Subsection (6) provided:

“In determining for the purposes of this Act whether a game, which is played otherwise than against one or more players, is a game of chance and skill combined, the possibility of superlative skill eliminating the element of chance shall be disregarded”.

The FTT found that STB constituted a “game” and that it therefore fell within the exemption.


The UT considered that the conclusion of the FTT was not one open to it on a proper understanding of the law. The FTT had found the authorities to be of limited assistance, however, the UT concluded that further weight should have been given to them.

The UT sought to dissociate “playing” STB from football and preferred to consider an imagined game of “Spot the Star”, involving a doctored photograph of the night sky.

At its peak, STB had attracted around 1.6m entrants each week. However, the UT considered the other participants could not be said to be “players”. Instead the entrant who pays a fee has entered into a contract between himself and the operator. What the other participants are doing does not matter.

Similarly, the UT found that a participant in STB could not be said to be “playing” against the panel, who make their selection independently before the two are compared.

The UT was of the view that Earl of Ellesmere v Wallace7 was authority for the proposition that the STB participant could not be said to be playing against the operator. In that case, a Jockey Club was bound by contract to hold a race and to pay prize money to the owner of whichever horse won. The owner who entered his horse into the race was not in competition with the Jockey Club, who were indifferent as to which horse won (the prize money would be paid in any event). The owner was not therefore playing a game with the Jockey Club.

The UT therefore allowed the appeal, finding that the operators of STB competitions were not providing facilities for the playing of games of chance.


It is perhaps a little surprising that the UT concluded that there is no relationship between the players of STB. This is particularly so if one considers that in a hypothetical panel game with two entrants and a single prize, it is the player who is closest to the “correct” panel decision who will win the prize.

Given that £93m is in issue, an appeal to the Court of Appeal may follow.

To read the FTT decision click here.

To read the UT decision click here.