Coo-Coo- Ca-choo, Mrs Linneweber

FOBT, stakes, Industry, politics, finance
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Taking a trip back to the source, Sam Spencer argues that the latest news from the Linneweber VAT disputes can’t possibly affect the DCMS’ decision on when to cut FOBT stakes for the sake of problem gamblers. Can it?

It all began in Bavarian bars at the turn of the millennia where Mrs Edith Linneweber was left in charge of her late husbands gaming machines. Widowed in 1999, the German taxman came in 2002 for unpaid tax on Mrs Linneweber’s machines, which she and her husband had declared exempt for the years 1997 and 1998.

A three year battle ensued, ending with a European Court of Justice judgement that sided with Mrs Linneweber. Essentially, her machines were being treated as liable for VAT, while the same machines in casinos were not.

Hence the concept of “fiscal neutrality” was born, and this is the same concept being used by Rank, Betfred, and working men’s clubs today.

But should these complex, long-standing taxation battles, which take years to come to conclusion, have any effect on when FOBT stakes are cut? Surely not.

However, according to some commentators in the industry, they will – and perhaps already have. It’s been no secret that the biggest opponent of a stake cut (and the biggest proponent of a cut delay) – aside from the bookmakers – has been the Treasury.

Indeed, it has even been suggested by some that, throughout the FOBT debate, the Linneweber case was always at the back Philip Hammond’s mind.

On top of the Treasury’s reported “backroom deal” with the bookmakers, this would be almost equally disappointing discovery. When the amusements industry is lectured about social responsibility – which is essentially a pledge to put morals over money – we always take it seriously. Meanwhile, money over morals appears to be the default policy of the government, who are willing to let FOBTs continue to cause chaos on British highstreets because of a “backroom deal” with the bookmakers,and one ballsy Bavarian operator.

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