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‘Spot the Ball’ Is a VAT-Exempt ‘Game of Chance’

In a crucial decision for anyone involved in the gaming industry, the Court of Appeal has ruled that a ‘game of chance’, within the meaning of the Gaming Act 1968, can be an entirely solitary occupation and does not require any interaction between players.

The case concerned ‘spot the ball’ competitions in which players guess the position of a ball which has been deleted from a photograph. Prize winners are selected by a panel of experts and there was no dispute that such competitions combine elements of skill, knowledge and chance.

A number of operators of such competitions argued that they benefited from the gaming exemption enshrined in the VAT Act 1994. However, HM Revenue and Customs insisted that ‘spot the ball’ is neither a game, nor a game of chance. The operators’ arguments prevailed before the First-tier Tribunal but that decision was later reversed by the Upper Tribunal.

In upholding the operators’ challenge to the latter ruling, the Court of Appeal found that the word ‘game’ did not import any requirement that a competitor has to make a move and respond to another’s move, or at least to a change in circumstance resulting from that move. There was no hard and fast rule or presumption that a ‘game’ must involve inter-player participation. ‘Spot the ball’ also involved a sufficient element of chance and the exemption therefore applied.