A £25m windfall is on the cards for Rank, the gaming business, after a tribunal said that Revenue & Customs had been inconsistent in the way it levied value added tax on slot machines.

The case concerned variations in the tax treatment of "one-arm bandits", the coin-operated machines that randomly generate cash pay-outs. Before 2005, when the government revised the rules, some of these machines were exempt from VAT depending on whether or not the "random number generator", which determines the outcome of the game, was located on the machine or separately.