Takings from computerised slot machines are subject to value added tax (VAT), the Supreme Court has ruled in a dispute over “what is a gaming machine?”.
Gaming operators Rank argued new tech terminals were not gaming machines - and thus not subject to the tax - because the “element of chance” in a game was not provided by the machine itself.
That element, it was contended, was provided by a random number generator (RNG) located outside the machine, often with several terminals served by a single RNG.
The VAT and Duties Tribunal agreed with Rank that the machines were not “gaming machines” because the RNG was not part of any terminal and the chance element was not provided by the machine containing the slot.
The High Court also agreed but the Court of Appeal disagreed and held that each terminal and the single RNG could together constitute a machine.
Now five Supreme Court justices have put an end to the game of legal chance and unanimously upheld the appeal court judges.
The five ruled the outcome of a game involved a player pressing a button or pulling a lever on the machine terminal, as a more sophisticated equivalent of a player rolling a dice.
That action itself was the active means of winning or losing the game, and the machine was therefore a gaming machine.