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England and Wales High Court rejects JR: ESC 3.4/3.5 give no legitimate expectation to disapply AMLD on RNG-linked gaming machines (R (Thomas Holdings) v HMRC)

Published on: 15 July 2025

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R (on the application of Thomas Holdings Ltd and others) v HMRC [2025] EWHC 1660 (Admin)

The proceedings concerned judicial review challenges to AMLD assessments regarding a category of machines operated by the claimants in amusement arcades and bingo halls. It was undisputed that the assessments were correct, as the machines properly fell to be treated as 'gaming machines' under section 25 of the Betting and Gaming Duties Act 1981, where 'the outcome of the game is inherent in the action of the machine'.

The claimants nevertheless maintained that, for each assessment, ESC 3.4 or 3.5 (both in force at the relevant time) ought to have been applied, with the result that the AMLD liabilities would not be enforced. ESC 3.4 (misunderstanding) and ESC 3.5 (misdirection) related to VAT and are now obsolete, but HMRC accepted they could, in principle, apply on the facts and therefore should have been considered so the liabilities would not be pursued.

Over twenty years ago, random number generators (RNGs) were developed. RNGs function by continuously producing random numbers...

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