Finance Bill 2002: EXPLANATORY NOTE
CLAUSE 9: AMUSEMENT MACHINE LICENCE DUTY: RATES OF DUTY
SUMMARY
1. Clause 9 increases the rates of amusement machine licence duty on certain gaming machines from 1 May 2002.
DETAILS OF THE CLAUSE
2. Subsection (1) increases the cost of a licence for a gaming machine that costs more than 5 pence per play and has a maximum permitted prize of £25; and for a gaming machine that falls outwith any of the other four categories for the purposes of amusement machine licence duty.
3. Subsection (2) makes the change effective for any application received by Customs after midnight 30 April 2002.
BACKGROUND
4. Amusement machine licence duty is charged on licences that allow amusement machines to be provided for play. There are five categories of amusement machine. These are: category A - machines that are not gaming machines (known to the trade as pinball, video and skill with prizes machines); category B - gaming machines with a maximum prize of £8 or costing 5 pence or less per play (known to the trade as amusement with prizes, five-penny all cash machines or five-penny jackpot machines); category C - gaming machines that pay a maximum of £25 (known to the trade as all cash machines); category D - gaming machines that cost 10 pence or less per play and are not in category B or C (known to the trade as ten-penny jackpot machines); and category E - any gaming machine that does not fall into any other category (known to the trade as jackpot machines).
5. In January this year, the permitted jackpot prize limits were increased for category C machines from £15 to £25; and for gaming machines located in casinos, the vast majority of which require category E licences, from £1,000 to £2,000. This measure, to reflect these increases, changes the duty rates for categories C and E.
6. The cost of a 12-month licence for a category C machine will increase by 2.2% to £695.
7. The cost of a 12-month licence for a category E machine will increase by 2.47% to £1860.
8. The revenue impact of the increases will be negligible when considered alongside the freezes for the other categories of machine.
9. The increases will take effect for any application for a new licence received by Customs after 30 April 2002.