Commentary

V4.131 Exemption—betting, gaming, dutiable gaming machines and lotteries

Part V4 Exemption, zero-rating and reduced rates

V4.131 Exemption—betting, gaming, dutiable gaming machines and lotteries

Betting, gaming etc.

V4.131 Exemption—betting, gaming, dutiable gaming machines and lotteries

EU legislation

The exemption extended to betting, gaming and lotteries, whether lawful or otherwise (a member state may not impose VAT on unlawful gaming when the corresponding activity carried on by a licensed public casino is exempt1), is derived from Directive 2006/112/EC, art 135(1)(i)2, which exempts 'betting, lotteries and other forms of gambling, subject to conditions and limitations laid down by each Member State'. Such conditions and limitations may provide that similar forms of gambling may be taxed differently, provided that those forms are not in direct competition with each other; Leo-Libera GmbH v Finanzamt Buchholz in der Nordheide (Case C-58/09), ECJ. See also Finanzamt Gladbeck v Edith Linneweber and Finanzamt Herne-West v Savvas Akritidis (joined Cases C-453/02 and C-462/02), where the Court was asked to decide on the legitimacy of the German authorities excluding from exemption the provision of gaming machines and card games unless such provision was under the auspices of a licensed public casino. The Court held that such an exclusion was precluded if the machines/games which were operated/organised in casinos were similar to those operated/organised elsewhere. In deciding whether such activities were similar, it was necessary to consider whether they were in competition with one another from the viewpoint of the average consumer, having regard to the potential scale of winnings and the gambling risk. Following the Linneweber decision, a number of repayment claims were submitted by UK businesses on the grounds that they

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