Gambling chips equal to cash

Posted: 15th November 2013

Gambling chipsThe Court of Appeal has ruled that gambling chips are the same as cash in rejecting a club’s arguments that it is entitled to deduct the value of incentives it provides to high-rolling punters from its liabilities to Gaming Duty.

As an encouragement to its wealthy clients, the club offered commissions or percentage rebates to punters who staked more than a given sum during a prescribed period, usually 14 days. The club argued that the value of those incentives should be deducted from its ‘banker’s profits’ for the purpose of calculating Gaming Duty under the Finance Act 1997.

The club’s arguments failed before the First-tier and Upper Tribunals. In challenging the latter decision, the club argued that the value of a bet staked by a punter should be calculated as the face value of the chip, less any commission that the club paid him as a valued client.

Dismissing the appeal, the Court found that there was no ambiguity in the statutory definition of ‘banker’s profits’, that being ‘the value, in money or money’s worth of the stakes staked’. The Court ruled, “Staking a chip is the same as staking money and the value in money of the chip is its face value.

“The stake is the amount risked in connection with the game; it is the value of that stake that is put at risk in the game. The value put at risk in the game is not altered by reference to any commission the player receives." The Club’s arguments also failed in respect of rebates that it provides to stem the losses of high-spending clients.