The last 5 years has seen an explosion in the number of casino's running regular poker tournaments to their players. These tournaments vary widely in entrance fee, with a fixed participation fee charged by the casino which is subject to VAT.
Now the British government has announced that it plans to review how this is taxed, with a view to also introducing gaming duty on this form of income.
Gaming duty is a tax taken on gross profit (total income - prizes) that the casino or card room makes from tournament entrance fees, meaning that they are effectively taxed twice for the same transaction. Other forms of gambling, like Bingo, are already to subject to this with Bingo firms paying both sets of tax per entrant.
So how will this effect poker players in the UK? Whilst casino's aren't renowned for their generosity, it isn't inconceivable that they will carry this hit themselves in order to continue to attract players.
However, it is likely that we will see either an increase in the entrance fees charged or a reduction in the prize pool in order to counteract the increased cost of staging an event.
The treasury has not announced a date for the completion of this review, however we could usually expect it to come as part of a pre-budget announcement, either in October or next spring.
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