Rank Group is looking forward to receiving a windfall from an unlikely source. The UK’s tax authority, HM Revenue & Customs (HMRC), was accused of improperly assessing tax rates on some gaming activity, which a court acknowledged. Now that the HMRC has apparently decided not to appeal the ruling, it will have to pay back millions of dollars taken between 2005 and 2013. Since the HMRC cannot challenge its appeal anymore, the LSE gambling group now has a guarantee on the tax rebate.
Approximately $110 Million VAT Refund Is Expected
Investors were notified that Rank governance expects HMRC to credit the business with approximately $100 million (£80 million) via a VAT refund. The dispute’s original plaintiffs were Rank and Betfred, which then had separate challenges against HMRC. These challenges were created for FOBT’s that have VAT-specific charges, even though no other gaming verticals were applied the said charges.
This past June, a UK court settled the dispute that lasted for ten years. It concluded that it was the tax agency’s fault for failing to provide a distinction on the games, better known as FOBTs (fixed odds betting terminal), while the disputed period lasted. Hence, the ruling went against HMRC and the court sided with the gambling companies.
More Gaming Operators to Benefit
Moreover, the ruling from the Upper Tribunal opened numerous doors because many businesses associated with gambling and operated machines during the mentioned period appealed for tax rebates. That is why with this judgment, HMRC is likely to have to pay a lot of money in total settlements; perhaps upwards of $1.3 billion (£1 billion).
In 2020, Betfred, a reputable gambling operator that was created by the Done brothers, received a credit worth around $136 million (£99 million). That helped the company make a profit in a year that provided gambling businesses with serious trouble due to COVID-19.
In the previous week, the 2020/2021 results were published by Rank. The financial results registered a group-wide loss of over $125 million (£93 million), mainly because Mecca Bingo and Grosvenor Casino spent a majority of the year under lockdown.
COVID-19 Still a Problem for Operators
While many experts believed that the pandemic will be over in 2021, that is so far not the case. The Delta variant keeps spreading across the planet and in order to protect everyone, vaccines have become mandatory.
In addition, some casino resorts have taken matters into their own hands. For example, MGM Resorts introduced vaccines as a condition for being employed. Many casinos also require their patrons to have a vaccination card if they want to enter their facilities and enjoy the games.
These rules went far beyond the gambling industry, as many other well-known brands such as Google, Walmart and United Airlines have introduced mandatory vaccines that are applicable for all employees or a part of them.