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VAT on Gaming Participation Fees, Bingo Duty, Amusement Machine licence duty and other gaming measures

The measures

  • Participation (or ''par'') fees which are the charges that a gaming operator makes to customers for participating in a game of bingo and other games of chance will become VAT exempt.
  • Bingo duty will be increased from 15% to 22%
  • An increase from £50 to £70 in relation to the money prize limit for the purposes of the bingo duty exemption that may be offered on small scale amusements provided commercially at, for example, family entertainment centres and gaming centres.
  • Player to player gaming in casinos will be brought into the gaming duty regime.
  • The gross gaming yield ('GGY') bandings for each gaming duty band will rise in line with inflation.
  • The scope of remote gaming duty will be extended to include remote bingo and remove remote bingo from the scope of bingo duty.
  • Clarification will be given to the definitions of 'gaming' and 'gaming machine'.
  • Amusement Machine Licence Duty ('AMLD') will increase for all categories of gaming machine and there will be changes to the legislation to make additional classes of gaming machines exempt from AMLD, increase the stake and prize levels for Category C machines and make changes to 'special licences' and 'seasonal licences'.
  • There will be a consultation on the reform of AMLD so that duty due on making a gaming machine available for play is calculated by reference to gross profits from the machine rather than a licence.

Who will be affected?

These changes concerning VAT, bingo duty, gaming duty and AMLD will impact the gaming sector including casinos, anyone making a gaming machine available for play and any business, club or institution offering non-remote or remote bingo or other games of chance.

When?

  • VAT will be removed from par fees on and after 27 April 2009.
  • The increase in the money prize limit for small scale amusements will have effect for bingo played on and after 1 June 2009.
  • The bingo duty increase will have effect for any accounting period beginning on or after 27 April 2009.
  • Gaming duty will have effect for changes made in connection with equal chance gaming in casinos on and after 27 April 2009.
  • With effect from 27 April 2009 dutiable gaming for the purposes of gaming duty will no longer depend on games individually specified in law.
  • The changes to the GGY bandings have effect for accounting periods starting on or after 1 April 2009.
  • The amendments to the legal definitions of 'gaming' and 'gaming machine' have effect on and after the date that Finance Bill 2009 receives Royal Assent.
  • The new AMLD for gaming machines will have effect for any licence applications received at HMRC Greenock accounting centre after 4.00pm on 22 April 2009.
  • The other AMLD legislative changes will have effect on 1 June 2009.

Our view

Recent VAT litigation has highlighted that VAT on gaming is not applied on a consistent basis and needs to be reformed. The removal of VAT on par fees is likely to be in recognition of this and will be a welcome simplification which will remove the double tax on bingo. The increase in bingo duty and AMLD is likely to be less welcome although the consultation on moving AMLD to a gross profits basis rather than a tax on the licence may result in further simplifications.