© 2025 by Michael Firth KC, Gray's Inn Tax Chambers
Contact: michael.firth@taxbar.com
H7. Betting and gambling
GENERAL
Domestic law exemption
"(1) The provision of any facilities for the placing of bets or for the playing of any games of chance for a prize.
(1A) The provision of any facilities for the playing of dutiable machine games (as defined in Part 1 of Schedule 24 to the Finance Act 2012) but only to the extent that—
(a) the facilities are used to play such games, and
(b) the takings and payouts in respect of those games are taken into account in determining the charge to machine games duty.
(2) The granting of a right to take part in a lottery." (VATA 1994, Sch 9, Group 4)
EU law exemption
"(i) betting, lotteries and other forms of gambling, subject to the conditions and limitations laid down by each Member State;" (Article 135)
- Power to lay down conditions and limitations does not authorise breach of fiscal neutrality
"[27] In that regard, it must be pointed out that the exemptions provided for by Article 13(B) are to be applied in accordance with the principle of fiscal neutrality inherent in the common system of VAT (see, to that effect, Case C-45/95 Commission v Italy [1997] ECR I-3605, paragraph 15). That requirement also applies when the Member States exercise their power under Article 13(B)(f) to lay down the conditions and limitations of the exemption. In according that power to the Member States, the Community legislature did not authorise them to undermine the principle of fiscal neutrality which underlies the Sixth Directive." (Fischer C-283/95)
- No distinction between lawful and unlawful transactions
"[28] As pointed out in paragraph 21 of this judgment, it is clear from the judgment in Lange that the principle of fiscal neutrality precludes a generalised distinction from being drawn in the levying of VAT between unlawful and lawful transactions. It follows that Member States cannot reserve the exemption solely to lawful games of chance." (Fischer C-283/95)
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