Supreme Court rules that “Non-Negs” are not part of the “banker’s profits” for the purposes of gaming duty

30 Nov 2020

Commissioners for Her Majesty’s Revenue and Customs (Appellant) v London Clubs Management Ltd (Respondent) [2020] UKSC 49 On appeal from: [2018] EWCA Civ 2210

This case, which is of significant interest to the gaming and casino sector, centres on the treatment of “non-negotiable gaming chips” and “free bet vouchers” (collectively referred to as “Non-Negs” for the purposes of this appeal) when it comes to calculating an operator’s gaming duty.

From October 2008 until September 2012, London Clubs Management (“LCM”) included the face value of all the Non-Negs played by gamblers and retained by its casinos in the calculation of its banker’s profits for the purposes of computing its liability for gaming duty. It subsequently considered that this approach was incorrect and claimed that it had overpaid gaming duty by over £1.97 million.

HMRC rejected LCM’s claim for repayment of the alleged overpayment and LCM appealed that decision. The First-tier Tribunal dismissed LCM’s appeal. The Upper Tribunal allowed LCM’s appeal. The Court of Appeal then dismissed HMRC’s further appeal. HMRC appealed to the Supreme Court but this appeal has now been dismissed, although the members of the Supreme Court disagreed on the reasons for dismissal, with two members adopting a different analysis from that of the majority.

George Peretz QC represented HMRC. Read full judgment here.