(Sharecast News) - Ladbrokes-owner GVC Holdings is on course to receive a £200m windfall after the government decided not to appeal a key ruling over historic tax payments.
The industry-wide dispute was centred on the application of value-added tax liability to certain gaming machines as well as fixed odds betting terminals (FOBTs) within licensed betting shops.
A legal challenge was launched when rival bookmaker Betfred, which is owned by Conservative Party donor Fred Done, claimed it had been overpaying VAT on winnings from terminals between 2005 and 2013.
A tribunal went on to rule in favour of Betfred and fellow leisure business Rank Group, which also launched an action against Her Majesty's Revenue & Customs. Its dispute was centred on VAT liability prior to December 2005.
On Wednesday, HMRC said it would not appeal the tribunal's ruling, paving the way for a rebates across the industry. William Hill has already confirmed it could receive up to £150m, while on Thursday GVC said: "The group understands it will be eligible for a rebated of historic VAT incorrectly paid on gaming machine revenues from its own Ladbrokes betting shops in the period 1 October 2002 to 31 January 2013.
"The group estimates that this will result in a cash inflow of approximately £200m."
As a whole, it is thought that industry could recoup as much as £1bn because of the ruling.
In 2018, the government slashed the maximum bet on FOBTs from £100 to just £2 over concerns that players were quickly able to rack up losses and become addicted.
9 Jul 2020 10:23
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