‘Spend the money quickly, Mr Bond’.
‘I intend to, Kamal Khan’.
The UK’s bookmakers have been successful in their case against HMRC over the VAT treatment of FOBTs, as first reported by GBGC last month. Now HMRC has decided not to appeal, the listed firms are revealing their estimated winnings.
William Hill made an announcement stating ‘the Board has considered a number of scenarios which suggest a potential net cash recovery of between £125m and £150m’.
This was followed by GVC Holdings, owner of Ladbrokes and Coral, which said:
‘The Group understands it will be eligible for a rebate of historic VAT incorrectly paid on gaming machine revenues from its own Ladbrokes betting shops in the period 1 October 2002 to 31 January 2013. The Group estimates that this will result in a cash inflow to the Group of approximately £200m’.
But the bookmakers would do well to heed the menacing advice given to James Bond by the villain Kamal Khan in Octopussy and spend their good fortune quickly because the government is going to get the money back one way or another. It can’t afford not to.
The timing of the ruling could not have been worse. Certainly, the bookmakers could do with the cash, given that their betting shops have been forced to close for an unspecified period of time.
But, equally, the government also needs every penny it can find at the moment because of the amounts it is both borrowing and spending in the efforts to halt the COVID-19 pandemic.
One of the easiest ways to start recovering the money would be to increase General Betting Duty (15%). Remote Gaming Duty was increased to 21%, effective from October 2019. It is an easy argument to make that this disparity needs to be equalised and betting duty must also be increased.
Everyone knows the adage that ‘the bookmakers always win’. In this case, however, it is unlikely to be for long.