Broadway Gaming lost appeal for £4.9m tax refund

The First Tier Court has dismissed an appeal by Broadway Gaming, a UK-based online gambling company, against Her Majesty’s Revenue and Customs (HMRC) over a £4.9 million gambling tax refund. pounds ($6.39 million).

Broadway Gaming provided inadequate expense documentation

One of the main reasons the first level court dismissed the online bingo and casino operator’s claim was that Broadway Gaming failed to provide sufficient evidence of the expenses.

Previously, Broadway Gaming filed a claim for a gaming tax refund from December 2014 to September 2017. The company said it was entitled to treat free games as an expense on prizes for purposes of calculating benefits. HMRC rejected the claim saying that under the company’s wagering requirements consumers must replay games multiple times in order to withdraw the free play funds and that these free bets could not be counted as expenditure for the purposes of the profit statement.

Broadway Gaming then issued an appeal pointing out that the gray areas of the 2014 finance law indicated that it was not exhaustively defined what a price includes in relation to the calculation of profit.

A “chicken and egg situation”

The court agreed and likened the situation to a “chicken and egg situation” regarding the transition from free games to funds that can be withdrawn. It did, however, uphold Broadway Gaming’s appeal regarding its claim that free games (including bonuses, free spins, etc.) could be used in calculating profits for remote gaming purposes.

The first tier court accepted HMRC’s second claim that Broadway Gaming had submitted insufficient and inadequate alternative spreadsheets for the company’s expenses.

The online bingo and casino operator has the right to appeal the court’s decision but has not yet indicated whether it will do so.

In December 2021, Broadway Gaming subsidiary Saphalata Holdings Ltd acquired 888’s B2C and B2B bingo businesses for $54 million. 888 has decided to sell its bingo business in order to focus on its casino business and betting offerings. Itai Pazner, CEO of 888, said the sale of 888’s bingo division would allow the company to focus more on developing its core products, namely casino and wagering offerings.

On the other hand, David Butler, Managing Director of Broadway Gaming, said the company was delighted to purchase 888’s bingo business and platform. He added that Broadway Gaming and 888 had worked closely together over the months and that the Broadway Gaming team is impressed with the quality of 888’s platforms and the company’s attitude towards safe gambling and customer protection.