Broadway Gaming Lost an Appeal over £4.9 Million Tax Refund

Broadway Gaming Lost an Appeal over £4.9 Million Tax Refund

The First-tier Tribunal rejected an appeal filed by Broadway Gaming, a UK-based online gaming company, against Her Majesty’s Revenue and Customs (HMRC) over a £4.9 million ($6.39 million) gaming tax refund.

Broadway Gaming Provided Inadequate Expenditure Documentation

One of the main reasons the First-tier Tribunal dismissed the bingo and online casino operator’s claim was Broadway Gaming’s failure to provide adequate evidence of expenditure.

Earlier, Broadway Gaming filed a claim concerning a gaming duty repayment from December 2014 to September 2017. The company stated that it was entitled to treat free plays as expenditure on prizes for calculating profit purposes. HMRC dismissed the claim stating that, per the company’s betting requirements, the consumers have to replay games several times in order to withdraw any free play funds and these free wagers could not be counted as expenses for the purposes of profit reporting.

Broadway Gaming then launched an appeal stressing that the grey areas in the Finance Act 2014 indicated that it was not comprehensively defined what a prize includes when it comes to the calculation of profit.

A “Chicken and Egg Situation”

The court agreed and compared the situation with a “chicken and egg situation” concerning the transition of free plays into funds that could be withdrawn. It, however, upheld Broadway Gaming’s appeal related to its claim that free plays (including bonuses, free spins, etc.) could be used in calculating profit for remote gaming duty purposes.

The First-tier Tribunal agreed with the second claim of HMRC, according to which Broadway Gaming had submitted insufficient and “inadequate alternative spreadsheets” for the company’s expenditure.

The bingo and online casino operator has the right to appeal the tribunal’s decision but has not reported yet if they are about to do so.

In December 2021 Broadway Gaming’s subsidiary company Saphalata Holdings Ltd acquired 888’s B2C and B2B bingo business for $ 54 million. 888 decided to sell its bingo business in order to focus on its casino activities and betting offerings. Itai Pazner, chief executive officer of 888, commented that the sale of 888’s bingo division would allow the company to concentrate more on the development of its key products, namely casino and betting offerings.

On the other hand, David Butler, chief executive officer of Broadway Gaming, said that the company is pleased to purchase 888’s bingo business and platform. He added that both Broadway Gaming and 888 had worked closely together in the last several months and Broadway Gaming’s team is impressed by the quality of 888’s platforms and the company’s attitude towards safe gambling and customer protection.

Author: Ian Douglas