A combined $1.2 billion in compensation claims from gaming and wagering giants Tatts Group and Tabcorp is back in play following a new appeal, which presents a huge gamble for the state government and taxpayers.

Melbourne-based Tabcorp said on Thursday it will appeal against the Supreme Court's judgment that it was not entitled to a compensation claim from the Victorian government of $686.8 million following the loss of its poker machine licence in 2012.

Tatts and Tabcorp argue they should have been liable for pokies levies of just $7 million. Credit:Brendan Esposito

The appeal follows the Victorian government's confirmation this week that it will also appeal a finding that it must pay compensation of $451.2 million plus interest of $89 million and costs to Tatts.

The dual appeals mean a clear outcome for shareholders of Tatts and Tabcorp is some time off, while also hoisting a dark cloud over the state government's books.