TLDR
- The UK plans a finance bill to clarify how freeplay gambling promotions are taxed.
- The move follows Jumpman Gaming’s court win against HMRC over its Mega Reel promotion.
- The Upper Tribunal ruled that free spins from the promotion are not taxable.
- The ruling saved Jumpman Gaming about £13.2 million ($17.5 million) in duties.
- The bill would rename freeplays as “restricted plays” and update rules for prizes and tournaments.
The UK government plans to introduce a new law that would clarify how gambling freeplay promotions are taxed. The move follows a court case that gambling operator Jumpman Gaming won against HM Revenue and Customs (HMRC).
The proposed changes were outlined in the 2026 Budget. They would update the rules for freeplay promotions, prizes, and tournaments under the UK’s remote gaming duty.
Jumpman Gaming Wins Freeplay Tax Case
Jumpman Gaming is owned by Super Group and describes itself as a leading innovator in iGaming. The company challenged an HMRC ruling tied to its Mega Reel promotion.
Under the promotion, customers who made a qualifying deposit received a free Mega Reel spin. That spin could win them free spins on a range of games.
HMRC argued that the free spins won from the first spin should count as gaming payments. It said they should be subject to remote gaming duty.
The tax authority sought to recover duty on promotional bets placed between July 2018 and December 2022.
The Upper Tribunal sided with Jumpman Gaming. It ruled that the exclusion for freeplay promotions, such as the Mega Reel spin, also covers any extra spins the promotion generates.
The tribunal concluded that the spins granted through the promotion are not taxable. The decision saved Jumpman Gaming about £13.2 million ($17.5 million) in duties.
What the New Finance Bill Would Change
The UK government now plans a finance bill to settle the question. The bill would change the existing freeplay rules under remote gaming duty.
Under the new measure, freeplays would be called “restricted plays.” The bill would clarify how plays won from another restricted play are exempt from tax.
The legislation would also set out when taking part in a tournament counts as a game of chance. This would help define which tournaments fall under the duty.
The bill would also change how prizes are defined and treated for tax purposes.
The plan comes as the UK makes other changes to gambling taxes. The government recently introduced a 5% increase to the Machine Games Duty.
The increase sets the Machine Games Duty at 25%. Some had called for a rate as high as 40%.
Industry stakeholders said they were disappointed by the change. They warned it could lead to job cuts and make the legal gaming sector less competitive.
The freeplay measure, outlined in the 2026 Budget, would cover restricted plays, tournaments, and prizes. It would set clearer rules on which promotional plays are exempt from remote gaming duty.
