Casinos seek tax reprieve on ‘free play’
Two of the biggest casinos in the Western Cape want to be exempt from paying tax on more than R127m of free play they give their most loyal patrons, arguing it should not be calculated as revenue.
A Cape Argus report says Sun International’s Grand West Casino and Entertainment World and Golden Valley Casino in Worcester have filed papers in the High Court to force the Western Cape Gambling Board and the provincial Minister of Finance to deduct the R127m from their more than R2.2bn they make on the slot machines.
Sun International contends that free play should be seen as an investment in the business and therefore deducted before determining tax. In court papers, free play is called the non-cashable credit which is loaded on to the customer’s card account, held by the casino.
‘Free play is not offered to all the players frequenting their gambling establishments. It is offered only to their qualifying loyalty programme customers. It constitutes a reward for a player’s loyalty.’
However, the provincial government, in its argument, said after the money is loaded on to the card with the additional cash, and once played, it constitutes the amount deducted from the player’s slot account.
As a result, slot machine play, according to the applicable tax act, is regarded as ‘drop’, and therefore revenue.
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