No one likes paying taxes. Duties on London Casinos are exceptionally high, and make up a notable portion of the region’s administrative budget each year. Now, according to an inside probe by The Bureau of Investigative Journalism, it seems some London casinos are avoiding the taxman by accepting bets on live feeds of roulette wheels from other casinos outside the capital.
“Two of Britain’s biggest casino companies are reducing their tax liabilities as a result of an arrangement involving the way they offer roulette to customer,” revealed The Bureau. During their investigation, they claim to have personally observed “confidential documents” attesting to this.
The article describes three London casinos that were able to shift income away from their establishments, thereby reducing their gaming duty responsibilities, by streaming live video feeds of roulette wheels from other casinos for their customers to wager on.
Players at those casinos are able to sit down at slot machines where the transmission is fed and place wagers on the roulette games based outside of London, with profits going to the casinos in the games actually take place.
“In this way,” explained The Bureau, “revenues can be booked away from London with the effect of avoiding higher rates of Treasury gaming duty.”
The Rank Group, which owns over 100 casinos in the UK, admitted to The Bureau that they’ve begun using live feeds of roulette wheels at three London casinos, and two others outside the capital. It was also discovered that Aspers Casino in Newcastle is streaming its roulette games to its Westfield Stratford City establishment in East London.
The Aspers Casino in Stratford also provides electronic roulette, giving their players the choice of playing on an automated wheel, or betting on the live feed games from Newcastle. According to the investigation, “Aspers has saved up to £850,000 from one casino last year – equivalent to about 5% of Stratford’s gaming duty bill.”
There is no evidence pointing to Rank or Aspers breaking any laws by providing live feed betting from their London casinos, but when asked his opinion by The Bureau, Shadow Chancellor John McDonnell said, “George Osborne needs to urgently crack down on this.”
Both companies said they sought legal advice from Ernst & young prior to implementing the remote wagering services, and staunchly deny that the move was motivated by a desire to avoid the capital’s higher tax rate.
Rank did admit, however, that saving on taxes “may well have been one of the drivers in exploring the use of remote gaming.” But the overall goal, stated by both companies, was to enhance the experience of their patrons, based on feedback from customers.
The Bureau claims to have “obtained a confidential internal document” from one of Rank’s subsidiaries, Grosvenor Casinos, that contradicts those claims. The document in question states that the objective was to stream live roulette feeds from London casinos to outer-lying areas, “thereby reducing the annual tax liability”.
It will be interesting to see where this investigation leads as The Bureau reported some London casinos are raking in “as much as £57m in revenues.”