On 30 April 2007, during the Committee of the whole House debate on clause 7 of the Finance Bill, my hon. Friend the Member for Wentworth (John Healey), the then Financial Secretary to the Treasury, made a statement concerning the taxation of bingo. He said:

“The policy of applying VAT and duty to bingo participation fees is entirely consistent with our treatment of other player-to-player games in licensed premises, such as poker played in casinos”. [Official Report, 30 April 2007; Vol. 459, c. 1303.].

Similar statements have also been made in response to numerous letters and parliamentary questions from hon. Members.

I regret to inform the House that these statements were based on an incorrect understanding of the effect of the legislation relating to gaming duty as set out in the Finance Act 1997. In fact the Finance Act 1997 does not apply gaming duty to participation fees for poker played in casinos, so participation fees for poker played in casinos are liable only to VAT.

I apologise to the House for this misunderstanding.

I can, however, assure the House that HMRC have, nevertheless, been applying the law correctly, and casinos have not been required to account for gaming duty on participation fees for poker.

In the light of the effect of the current legislation relating to gaming duty, I will be looking again at the tax treatment of participation fees for player-to-player gaming in casinos.