TC09643 - [2025] UKFTT 01117 (TC)

Fecha: 27-Ago-2025

Discussion

Discussion

54.

We begin by considering subsection 159(1) which, relevantly provides:

“where a chargeable person participates in remote gaming the “gaming payment” … is the aggregate of (a) any amount that entitles the person to participate in the gaming and (b) any other amount payable for or on account of or in connection with the person's participation in the gaming”

55.

None of the words used in that subsection is a defined term (rather, they are the ordinary words Parliament has chosen to determine what constitutes a “gaming payment”). That provision requires there to be a requirement to make a payment in order to participate in remote gaming. If no amount is required to be paid directly or indirectly in connection with participation, there is no gaming payment. As such a game for which participation is free for all will not, in our view, give rise to a gaming payment and will not therefore be within the scope of RGD.

56.

Subsection 4 expands what is included as a gaming payment when aggregated for the purposes of the profits calculation in circumstances “where the chargeable person participates in remote gaming in reliance on an offer which waives all of the gaming payment”, in that case “the person is to be treated as having made a gaming payment of the amount which would have been required to be paid without the offer.” In our view, this provision establishes a clear difference between the provision of a free game (i.e. one in which anyone is entitled to participate without payment) and being permitted to play a game for free (i.e. the participant is relieved of a pre-existing obligation to pay). In the latter case, the payment otherwise required is specifically scoped into the definition of a gaming payment and thereby included in the gaming profit calculation. In the former, participation is not subject to RGD because no amount is otherwise due as a gaming payment. Whilst gaming which requires no one to pay a wager or place a stake but provides an opportunity to win meets the definition of gaming (as provided in section 6 Gambling Act 2005) the participant does not risk and can never be asked to pay anything to participate and, as such, there is nothing to waive and thereby nothing to treat as a gaming payment.

57.

We consider the language to be clear and unambiguous in this regard and it certainly does not result in an absurdity. There is therefore no need to use any external aid to interpretation. However, we note that our conclusion is consistent with the terms of the Explanatory Notes when section 159(1) was first enacted in 2014 and when subsection (4) was enacted in 2017. These notes relevantly provide:

Explanatory notes to FA14:

… Part 3 – Chapter 3 “Section 159 provides that any amounts that are paid in connection with, or that will entitle a UK person to participate in, remote gaming will be treated as a “gaming payment”.”

Explanatory notes to FA17, Clause 67:

“1.

This clause amends the remote gaming duty (RGD) provisions in Part 3 of the Finance Act 2014 … to make certain freeplays chargeable with duty. …

[section 159(4)] imposes a value for duty purposes on any offer that waives the normal payment to participate in remote gaming. Where someone makes use of such an offer they will be deemed to have paid the full amount that would have been required without the offer.”

58.

We are reassured that paragraph 1 indicates that some freeplays were not intended to be subject to RGD confirming our view that participation in free gaming is not subject to RGD. Paragraph 4 explains that where a payment would be required but for the waiver (i.e. a normal payment) there is a deemed gaming payment.

59.

We then turn to analyse the arrangements between the Appellant and the Customer. On the basis of the facts as we have found them, it is apparent that in respect of an MR Spin the offer is for participation in a free game and not participation in a game for free. This is on the basis that:

(1)

The terms and conditions generally provide that promotional offers are made through use of the Mega Reel.

(2)

The terms of such promotional offers vary. However, the Welcome offer is made on the basis that the Customer receives “a free spin of the Mega Reel”. There is no indication on the offer for the Customer to participate in the Welcome offer Mega Reel that it is anything other than a free game. And for that customer pursuant to that offer it is a free game.

(3)

The pop-up box through which the Welcome offer is transacted bears no indication that there is a requirement to pay an amount to participate which will be waived. We do not consider the spin value shown on the reel an amount required to participate because it is not, it is an entirely notional sum which the Appellant does not require to be paid and which is accordingly not waived when, by accepting the Welcome offer, the Customer is forming a contract to play a free game. As such, we do not consider that even were the Customer to notice the spin value, they would consider that their entitlement to participate was on the basis of an offer to waive a payment otherwise required.

(4)

The back-office accounting which is undertaken whereby the spin value is credited to the Customer to be immediately debited again does not, in our view, represent a gaming payment. The credit and debit are invisible to the Customer. Further, the recording of the MR Spin differs from the way in which Free Spins are recorded. If there is synonymity between a Free Spin (participation in which both parties accept is pursuant to an offer to waive the gaming payment) we cannot understand why there would be this difference. In our view, the commercial reality is that the Appellant was forced to generate a debit and credit reflecting the spin value in order to substantiate its contention that there was an offer to waive the gaming payment. It not therefore evidence of the offer.

(5)

We do not consider the fact that the Mega Reel is the vehicle through which other promotions (by invitation) may be offered which involve a requirement to pay affects our conclusion (however frequently it may be so offered). When the Mega Reel is used in that way it is a separate game with different participation terms and conditions. Where those terms and conditions require a payment there is an amount required to participate and there is a gaming payment pursuant to section 159(1). Where participation is pursuant to an offer that waives the amount required to be paid there will be a deemed gaming payment pursuant to section 159(4). However, where the offer is to play a free game there is no gaming payment actual or deemed.

60.

We have considered whether the requirement that the Customer must deposit a minimum of £10 could be taxed as a gaming payment. Whilst we consider this to be the reciprocal performance necessary to create the contract for the Welcome offer MR Spin, we do not consider that the act of depositing £10 is capable of constituting “an amount” or “any amount” payable. Certainly, we do not consider that the £10 is such an amount as, at that stage, it is only deposited into the Customer’s account with the Appellant, it is not the payment made to participate.

61.

We therefore conclude that there is no amount to be included in the gaming profits calculation as a gaming payment in respect of the Customer’s participation in the MR Spin. The consequence of that conclusion is that the Appellant over-accounted for RGD on the spin value of MR Spins.

Excluded part

62.

This part of the Liability Issue centres on the mechanics of section 159A.