Gambling board wins SCA appeal
The Western Cape Gambling Board has been successful in its appeal against a Western Cape High Court judgment regarding the assessment of gambling tax payable by casino licence holders Grandwest and Worcester casinos.
A Cape Times report says the SCA has upheld an appeal over whether ‘freeplay credits’ – used to bet in slot machines attract gambling taxes and levies – was payable to the Western Cape Gambling & Racing Board.
In terms of Section 64 (1) of the Western Cape Gambling and Racing Act Four of 1996 gambling tax is payable on taxable revenue.
The full Bench of the Western Cape High Court had held that freeplay does not form part of taxable revenue under the Act.
At the heart of the case was the interpretation of the language used to define the ‘drop’ which is ‘the amount deducted from players’ slot accounts as a result of slot machine play’, says the Cape Times report.
The casinos interpreted the words used to exclude freeplay, essentially because the word ‘amount’ in the expression ‘amount deducted from players’ slot accounts … ‘ means ‘amount of money’ deducted from the players’ slot account.
That, according to the casinos, refers to the players’ own funds, and excludes freeplay.
They argued because they neither gain revenue nor derive any kind of benefit from freeplay gambling, it could have never been the intention to cause them to pay gambling tax on this.
The board argued that there is no distinction in the Act between gambling with freeplay and with players’ own resources.
It maintained that the word ‘amount’ referred to all the deductions made from the players’ slot account as players gamble on the slot machines.
Judge Nambitha Dambuza found: ‘The interpretation of the ‘drop’ advanced by the WC Board is not only grounded in the language used in s 64(1) and the definitions in Schedule III and IV, it also accounts for the purpose. The fact that a licence holder makes no gain or derives no benefit from a game of play is irrelevant in the assessment of liability for gambling tax. The appeal is upheld.’
Article disclaimer: While we have made every effort to ensure the accuracy of this article, it is not intended to provide final legal advice as facts and situations will differ from case to case, and therefore specific legal advice should be sought with a lawyer.
