HMRC Plans New Freeplay Tax Rules After Jumpman Tribunal Defeat
HM Revenue & Customs has set out plans to rewrite how Remote Gaming Duty (RGD) treats freeplays, with new rules due to take effect on April 1, 2027.
The measure was announced at Budget 2026 and published on October 28, 2026, just over a month after HMRC lost a freeplay tax case at the Upper Tribunal.
The timing matters for operators. On September 25, 2026, the Upper Tribunal ruled in Jumpman Gaming v HMRC that free spins won from a promotional spin did not give rise to RGD, reducing assessments of about £13.2m to nil.
HMRC's new policy paper does not mention the case, but it covers the same ground.
What HMRC Is Proposing
According to HMRC's tax information and impact note, Finance Bill 2026-27 will amend the Finance Act 2014 by replacing section 159A with new provisions on what it calls "restricted play".
The term will replace "free plays" in the legislation and covers offers that waive all or part of a gaming payment, plus non-withdrawable money provided by or for the gaming provider.
The legislation will also set out when a restricted play won by using another restricted play is excluded from RGD profits.
The exclusion applies where the won restricted play is used for remote gaming, and no other benefit is offered in its place.
Two further changes are planned. The rules on when taking part in a tournament counts as playing a game of chance will be amended, and the meaning of "prize" will be revised so that something is only a prize if it must be paid or provided under the published rules of the game.
The paper adds that a gaming payment returned after a game is interrupted or ends early may be treated as a prize in specified circumstances.
HMRC will also gain powers to make regulations on when a gaming payment is or is not treated as waived, and when an amount paid to enter a tournament is disregarded.
Why The Tribunal Ruling Matters
The Upper Tribunal's published decision turned on the words "the gaming" in section 159A(4)(b). Judges Swami Raghavan and Guy Brannan found that the phrase refers to the remote gaming identified in that subsection and is not limited to gaming played under an offer that waives payment.
They concluded that Jumpman's further free spins fell within the exclusion.
The assessments covered accounting periods from July 1, 2018 to December 31, 2022. The tribunal also dismissed Jumpman's separate argument on the welcome spin itself, leaving the First-tier Tribunal's finding on that point undisturbed.
HMRC's note says different interpretations of the tax treatment have arisen since the Finance Act 2017 added the freeplay rules, and that the government is amending the law to provide greater certainty.
It gives the objective as clear rules that "reduce the scope for dispute and protect future revenues".
Impact On Operators
The government expects no Exchequer impact in any year from 2026 to 2032, describing the change as an upstream compliance measure that reinforces existing policy rather than a revenue raiser.
It says only businesses are affected, with a negligible administrative burden and one-off familiarisation costs.
Operators that run welcome spins, bonus credits and multi-stage promotions will want to check their offers against the new definitions before April 2027.
The tribunal decision applies to the law as it stood in the assessment periods, so the new wording will govern promotions from the effective date.
Part Of A Wider Budget Gambling Package
The RGD change sits alongside other gambling measures in HMRC's Budget 2026 Overview of Tax Legislation and Rates, including a rise in Machine Games Duty on higher-stake machines from 20% to 25% from April 1, 2027. Our coverage of the Budget includes details on the increase in the machine games duty.
The freeplay measure still has to pass through Parliament as part of the Finance Bill 2026-27.
Operators should watch for draft clauses and any regulations that HMRC issues under the new powers.
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