GVC Holdings has learned that the UK tax authority, Her Majesty’s Revenue & Customs, has taken the decision not to appeal the ruling of the Upper Tribunal (Tax and Chancery Chamber) in the cases of the Done Brothers (Cash Betting) Ltd (trading as Betfred) and Rank Group Plc concerning the application of VAT to certain gaming machines and fixed odds betting terminals within licenced betting shops.

The Rank dispute concerned the VAT liability of gambling made using certain gaming machines prior to 5 December 2005 while the Done Brothers dispute related to the tax treatment of supplies of gambling by means of fixed odds betting terminals (“FOBTs”) during the period prior to 31 January 2013.

The Group understands it will be eligible for a rebate of historic VAT incorrectly paid on gaming machine revenues from its own Ladbrokes betting shops in the period 1 October 2002 to 31 January 2013. The Group estimates that this will result in a cash inflow to the Group of approximately £200m.