While the clarifications issued by the European court of justice bring an end to the dispute between the bingo industry and UK Revenue and Customs over VAT on bingo games there may be some bad news for bingo operators.

The decision released on Thursday supported land based bingo operators over VAT related to bingo games. The majority of operators have already received large rebates on VAT paid over recent years. However rebates paid out in relation to gaming machines may now have to be paid back to Revenue and Customs reports the Guardian. Revenue and Customs is expected to try and get back more than £100m it has refunded and will be looking to receive interest on top.

Revenue & Customs had sought clarifications from Europe following rulings in the British courts forcing rebate payouts to firms such as Rank Group, JD Wetherspoon, Gala Coral and Whitbread. Rebates had been paid out on the basis that UK VAT on gaming machines had been unfairly applied to some classes of gaming machines and not others. It was argued this was in breach of European rules on "fiscal neutrality".

Revenue and Customs suggested that the latest clarifications had helped clarified the situation: "We are studying the judgment and will issue further advice once the potential implications have been identified."

While the situation over gaming machines may not be completely clear the decision in relation to bingo games has favoured operators who have already received rebates. Rank, the owner of Mecca Bingo, was the company to have initiated the proceedings against Revenue and Customs has reportedly received refunds of £254m. Shares rose nearly 10% on Thursday as the ECJ decision was released.

It is not clear how much Rank stands to gain from the decision at the moment as there were reports that the gambling operator had taken out an insurance policy out after receiving some of the rebates. This would have meant if the company had lost the appeal bought around by Revenue and Customs then the insurance company would cover the repayment of the refund.

Other companies have recieved various amounts, some bingo operators have reportedly only put claims in for refunds for the VAT on bingo games as this was seen as a safe bet prior to the appeals. Given that several bingo companies, such as Top Ten Bingo and Gala Bingo, have had major finanical problems over the last 5 years and it comes as some surprise that both of them are still trading in similar structures today as they were before the smoking ban (e.g. the companies have not been broken up and the bingo clubs sold off) it may be given the desperate financial times they have come through that they have already received some rebates they may now have to pay back. At the time these may have been seens as medium term guaranteed loan without the negative effects on credit ratings.