Sportech, the UK gambling group, has announced that HMRC has had its appeal to challenge a recent decision on a VAT refund potentially worth more than £80m to the firm, denied.

The decision will come as a blow to the taxman, following the First Tier Tribunal (FTT) tax chamber's March finding, which was in favour of the gambling group regarding the VAT treatment of its 'Spot the Ball' game, for the period between 1979 and 1996.

HMRC had rejected Sportech's initial claim in December 2010, which said that 'Spot the Ball' is a game of chance and not a game of skill, and as such was free from VAT. The game is played by up to 40,000 people a week.

Sportech said it was 'pleased' with decision, while an HMRC spokesman said it 'is considering the position and has not yet made any decision on next steps.'