Gaming duty is a duty on casino gaming profits and is based on the gross gaming yield for premises where gaming takes place.

The gross gaming yield consists of:

• the total value of the stakes, minus players' winnings, on games in which the house is the banker, and
• any charges made in connection with dutiable gaming, including charges made for participation in equal chance games such as poker.

Gaming duty applies to games of chance, such as roulette, blackjack, where individuals play against a bank held by the gaming operator and to equal chance games, such as backgammon and poker, where the gaming operator provides facilities for customers to play against each other.

A recent Upper Tribunal decision examined the liability of gaming duty where a casino provides free bet vouchers or ‘non-negotiable’ chips to a player free of charge. These ‘non-negotiable’ chips are used to place bets at the gaming tables in the same way as cash chips. The First-tier Tribunal had rejected the appeal by London Clubs Management Limited and ruled that gaming duty was due on the face value of the voucher or chip.

This decision was appealed and the Upper Tribunal ultimately found that as there was no payment for the free bet by the player the ‘non-negotiable’ chips have no value for the purposes of calculating a liability to gaming duty. The taxpayer's appeal was allowed. This is an important decision and may have implications beyond gaming duty when looking at how to value prizes and vouchers. It is not yet known if HMRC will appeal the Upper Tribunal’s decision.