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<!DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd"> <html xmlns="http://www.w3.org/1999/xhtml"> <head> </head> <body> <div style="font-family:Verdana, Geneva, sans-serif; font-size:12px; text-align:justify"> <table width="800" border="0" style="border:1px solid #ccc;padding:5px;" align="center" cellpadding="6" cellspacing="0"> <tr> <td align="left" valign="top"> <br /> <br /><br /> Gambling tax is payable in respect of freeplay credits<br /><br /> - (04 Sep 2023)<br /><br /> </td> </tr> <tr> <td align="left" valign="top">The Western Cape Gambling Board & Another vs. Sunwest International & Another</td> </tr> <tr> <td align="left" valign="top" style="background-color:#FDEDCE"><strong>The Board, together with Sun International Subsidiaries Grand west and Golden Valley casinos approached the Western Cape High Court for resolution of a dispute between them as to whether freeplay should be excluded from the assessment of taxable revenue on which the casinos had to pay gambling tax. The high court agreed with the casinos’ interpretation of the relevant provisions of the Act and held that no gambling tax was payable on freeplay. <br><br> Freeplay refers to special non-cashable credits loaded by the respondents as casino operators onto card accounts that a group of gamblers known as the ‘most valued customers’ use when playing at their casino slot machines. These customers do not pay for freeplay. It is a gift or reward given by the casinos to their most frequent customers. It cannot be redeemed for cash. In terms of Section 64 (1) of the Western Cape Gambling and Racing Act 4 of 1996 gambling tax is payable on taxable revenue, which is defined in the Act as the adjusted gross revenue (AGR) less admissible deductions. AGR is defined as the ‘drop’ less fills in the slot machine and winnings paid out. The ‘drop’ is defined as ‘the amount deducted from players’ slot accounts as a result of slot machine play’. <br><br> The imposition of gambling and betting tax is a deliberate policy adopted by the Western Cape Provincial Government. The policy entails the charging of tax on holders of gambling licences for the act of conducting gambling businesses. Nothing is irrational about such policy. And the argument that the imposition of the tax in the absence of revenue or benefit amounts to unlawful deprivation of property is misguided. <br><br> The casino’s interpretation was based on an approach which was inconsistent with the accepted principles of interpretation of legal documents. On the casinos’ interpretation a word - revenue (or money) – would have to be impermissibly read into the definition of the ‘drop’, even though the section was not ambiguous. In addition, the argument relating to unconstitutionality of the Board’s interpretation found no support in the Act. Gambling tax is payable in respect of freeplay credits. The court found the Board’s interpretation consistent with the language used in the Act and in support of inclusion of freeplay in taxable revenue on which gambling tax is payable.</strong></td> </tr> <tr> <td align="left" valign="top" ><strong></strong></td> </tr> <tr> <td align="left" valign="top" ><strong>Tags : Assessment, Gambling tax, Payment</strong></td> </tr> <tr> <td align="left" valign="top"> </td> </tr> <tr> <!--<td><strong>Source : <a target="_new" href="http://www.manupatrafast.com/">newsroom.manupatra.com</a></strong></td>--> <td align="left" valign="top"><strong>Source : newsroom.manupatra.com</strong></td> </tr> <tr> <td align="left" valign="top"> </td> </tr> <tr> <td align="left" valign="top">Regards</td> </tr> <tr> <td align="left" valign="top">Team Manupatra</td> </tr> <tr> <td align="left" valign="top"> </td> </tr> </table> </div> </body> </html>