HMRC rewrites Remote Gaming Duty freeplay rules after losing the Jumpman case

HM Revenue & Customs has published new rules for how Remote Gaming Duty (RGD) treats free spins, bonus credit and tournaments, about a month after it lost a £13.2 million dispute over exactly that question. The policy paper, published on 28 October 2026, replaces the current freeplay provisions with a new “restricted play” regime from 1 April 2027.

The case behind it is Jumpman Gaming Ltd v HMRC. HMRC had assessed Jumpman for £13.2m of RGD covering accounting periods from 1 July 2018 to 31 December 2022, according to Pinsent Masons’ Out-Law. HMRC accepted that Jumpman’s initial promotional “Mega Reel” spin was exempt, but treated the further spins won from it as taxable. The First-tier Tribunal sided with HMRC in September 2025. On appeal, the Upper Tribunal found that the lower tribunal had made a material misinterpretation of the law. As reported by Gambling.com, the ruling, dated 25 September 2026, reduced the assessments to nil, and turned on the words “the gaming” in section 159A(4)(b) of the Finance Act 2014, which the judges read as covering remote gaming generally rather than only gaming played under a payment-waiving offer.

What HMRC is changing

HMRC’s paper does not mention Jumpman by name. It says “different interpretations” of the tax treatment have arisen and that the measure will “establish clear rules” for restricted play, prizes and tournaments. The measure, to be legislated in Finance Bill 2026-27, would:

• Replace section 159A with “restricted play” provisions. Restricted play covers offers that waive all or part of a gaming payment, and non-withdrawable money provided by or on behalf of the gaming provider.
• Set a single test for won freeplays. A restricted play won by using another restricted play is excluded from RGD profits where the won play “is used for remote gaming and no other benefit is offered in place of” it.
• Narrow “prize”. Something is a prize only where it is required to be paid or provided under the published rules of the game.
• Treat some refunds as prizes. A gaming payment returned after a game is interrupted or ends early may count as a prize in specified circumstances.
• Revise the tournament test for when taking part in a tournament counts as playing a game of chance.
• Give HMRC regulation-making powers over when a gaming payment counts as waived and when tournament entry amounts are disregarded.

HMRC scores the measure at nil for the Exchequer in every year to 2031-32, calling it “an upstream compliance measure intended to reinforce existing policy”.

Why it matters

RGD is not a UK-licensee tax. HMRC’s Excise Notice 455a says it is charged on profits from remote gaming by UK customers “regardless of where in the world the provider is located”. Every Gibraltar operator with UK-facing remote gaming therefore pays it, and the rate is now 40% of profits for accounting periods beginning on or after 1 April 2026, up from 21%. At that rate, the classification of a single promotional mechanic carries roughly twice the tax weight it did during the Jumpman assessment periods. We covered the wider UK duty picture in our report on the Budget’s machine games duty changes.

The new wording matters in three places:

1. Chained promotions. Free spins that award further spins, bonus wheels that award credit, and multi-stage welcome offers are exactly what the Jumpman dispute was about. From April 2027 the question is no longer how far section 159A(4)(b) stretches, but whether the won play is used for gaming and whether any other benefit was offered in its place.
2. Published game rules. Under the narrower prize test, what a game’s published rules say must be paid or provided becomes the reference point. Rules, terms and promotional copy that have drifted from how a product actually behaves are now a tax question as well as a compliance one.
3. Cash alternatives. Offers that let a player take something else instead of the won play look likely to sit outside the exclusion. Promotions built on “spins or cash” choices deserve a fresh read.

What operators can do now

• Map every live promotion that can award further freeplay, bonus credit or tournament entry, and check it against the new definitions before 1 April 2027.
• Review published game rules and promotional terms against product behaviour, since the prize test now leans on them.
• Watch Finance Bill 2026-27 and any HMRC regulations made under the new powers; the detail on waived payments and tournament entry has not been published yet.
• Keep the Jumpman ruling in context. As Gambling.com notes, the decision applies to the law as it stood in the assessment periods. Pinsent Masons partner Bryn Reynolds told Out-Law that HMRC “can be expected to challenge” the Upper Tribunal’s conclusions on the later spins, and Out-Law notes it is not yet clear whether HMRC will appeal.

Editorial Desk view

This is our opinion. HMRC losing in court and rewriting the statute a month later is not unusual, and the speed tells operators something: the freeplay rules are being treated as a revenue line worth defending, at a rate that is now 40%. The nil Exchequer costing is not a signal that nothing changes; HMRC’s own description of it as reinforcing “existing policy” suggests it sees the new wording as restoring what it always believed the law said.

For Gibraltar’s UK-facing operators, the practical risk is less the rate than the paperwork. A tax test that hangs on the published rules of the game rewards businesses whose rules, terms and on-site copy are accurate, consistent and current, and penalises those carrying years of accreted promotional pages. That is a content governance problem before it is a tax one, and it is cheaper to fix in the five months before April 2027 than in a dispute afterwards. Operators that want an outside read of what their sites actually publish can look at Casino.gi’s content audits and digital marketing services.

— Casino.gi Editorial Desk

Operators who want to discuss what the new rules mean for their published content can talk to Casino.gi.