Gaming and Games in UK Law

the “machine” to which reference is made is obviously that which is constructed for playing the game of chance, that which the player plays and that into which a coin or token is inserted (reading the Note to Group 4 consistently with Section 26 of the Gaming Act 1968).

Once it is held that there are games of chance played on “gaming machines” (the supply of which is subject to VAT) and there are games of chance played on machines that are not “gaming machines” (which are not subject to VAT), it is apparent that a breach of the principle of fiscal neutrality may have occurred. Applying the principles outlined above I would again hold that there was such a breach.

People do not game in order to win chips. They are mere counters or symbols used for the convenience of all concerned in the gaming. If actual money were lent to the defendant in order to game and the game were played for cash, the defendant would pay her own losses in cash and the plaintiffs would be under no obligation to pay anything to the winners.

The calculation of stakes staked under section 11(10)(b)), to my mind, in context, involves a conventional arithmetical calculation of real-world stakes received from players, which, if necessary, could feature as actual receipt or revenue figures in a set of accounts; it does not – on any natural reading — include artificial or notional values placed on tokens given to the player by the casino, as part of a promotional or marketing exercise, which intrinsically have no value and are non-negotiable, or at best have an economic value to the player equivalent to their face-value multiplied by the chances of winning.

For that reason taken on its own, I would not regard a Non-Neg as being a stake which was required to be taken into account in the calculation of gross gaming yield as defined under section 11(8) or of banker's profits as referred to or defined under section 11(8)(b)) or section 11(10).

If this is right, it follows in my view, and for like reasons, that a purpose built system comprising a terminal with a separate, but connected, RNG is also properly characterised as a 'machine'. The terminal cannot be used for gaming purposes except by being linked to the RNG; and the RNG is designed to be linked to the terminal in order to enable the game to be played.

If right so far, I also do not understand why the multi-terminal systems should be treated any differently. The fact that there is only one RNG serving several terminals cannot make a material difference. In substance, the systems are exactly the same as in both previous configurations. By like reasoning, I cannot see why each terminal and the single RNG do not together constitute a machine within section 26.