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Free Spins from Free Games Are Exempt from UK Remote Gaming Duty: The Jumpman Ruling Explained

By jili tutorial · October 7, 2026

Free Spins from Free Games Are Exempt from UK Remote Gaming Duty: The Jumpman Ruling Explained

The short version

On 25 September 2026, the Upper Tribunal (Tax and Chancery Chamber) ruled that Jumpman Gaming Ltd does not owe remote gaming duty on free spins won through its “Mega Reel” welcome promotion. The decision cancels HMRC assessments of approximately £13.2 million, reducing them to nil.

This is a significant result for the UK gambling industry. The tribunal held that free spins won from any remote gaming — including a game that is always free to play — do not attract remote gaming duty in the circumstances of this case. HMRC may still appeal, but operators affected by similar assessments should consider protecting their position now.

Why this case matters

The 2026 RGD rate rise

Remote gaming duty (RGD) is charged on operators’ profits from online gaming with UK customers. The rate was 21% for many years. From 1 April 2026, it rose to 40%. At that higher rate, the tax treatment of promotional free spins can mean the difference between a profitable promotion and a significant tax liability.

A test case for the industry

HMRC has recently been assessing operators to RGD in respect of games that are always free to play. The Jumpman case was a direct challenge to that approach. If the Upper Tribunal’s reasoning stands, other operators in similar positions may be able to claim refunds or have HMRC assessments withdrawn.

RGD and the freeplay rules: how the tax works

Operators pay RGD on profits from remote gaming

RGD applies to remote gaming — gaming played by UK customers through the internet, telephone, or other technology. Operators pay duty on their gaming profits. The tax is intended to apply where people pay to gamble online, but promotional freeplay creates a special problem.

What is “freeplay” for RGD purposes?

When an operator gives a customer a free bet or free spins, the customer is not using their own money. To stop promotions from escaping duty, section 159(4) of the Finance Act 2014 treats play on a freeplay offer as if the player had paid the amount that would otherwise have been required. That means the operator is taxed as if the freeplay had been a real stake.

The exception for freeplay won from gaming

The Finance (No. 2) Act 2017 added section 159A. Sections 159A(4) and (5) switch off that treatment where the freeplay offer “has been won in the course of the person’s participation in the gaming.”

The idea is that if someone wins a freeplay while already playing a game, the freeplay is a prize from that gaming. It should not be taxed again when it is used later. But exactly what “the gaming” means became the central argument in the Jumpman case.

The Jumpman Mega Reel promotion

What the operator did

Jumpman’s welcome promotion worked like this:

  1. A new customer opens an account and makes a qualifying deposit.
  2. The customer receives a free spin of the “Mega Reel.”
  3. The Mega Reel is a game of chance shown as a pop-up reel.
  4. Prizes include free spins on other games, such as Fluffy Favourites, King Kong Cash, and Chilli Heat.
  5. Prizes can also include cash and Amazon vouchers.

HMRC did not try to charge duty on the Mega Reel spin itself. The assessments were about the “Further Free Spins” that players won from the Mega Reel and then used on other games.

The disagreement

HMRC said the Further Free Spins were taxable. In HMRC’s view, the section 159A exception only applied if the freeplay had been won from an earlier freeplay offer. Because the Mega Reel was a free game — not a freeplay offer — the spins won from it did not qualify for the exception.

Jumpman said the exception applied because the Mega Reel was part of remote gaming. The phrase “the gaming” should be read broadly, not limited to freeplay offers.

The Upper Tribunal’s decision

The Upper Tribunal was made up of Judges Swami Raghavan and Guy Brannan. It allowed two of Jumpman’s three grounds of appeal and dismissed one. The tribunal concluded that the assessments “fall to be reduced to nil.”

Ground 1: dismissed — the Mega Reel was a free game, not a paid game played for free

Jumpman’s first argument was that the qualifying deposit made the Mega Reel a “paid game played for free.” If that argument had succeeded, the Mega Reel itself would have been treated as a freeplay offer, and the chain of free spins would have been caught by the freeplay rules.

The tribunal disagreed. It upheld the First-tier Tribunal’s finding that the Mega Reel was simply a free game. HMRC’s example of a wheel of fortune at a school fête helped explain the point: the same wheel can be played for fun at a fête or for money at a casino. The difference is not the mechanics of the wheel; it is the terms on which participation occurs.

Ground 2: allowed — the 2016 consultation could be considered

At the First-tier Tribunal, HMRC’s 2016 consultation on the tax treatment of freeplays was excluded from consideration. On appeal, HMRC did not defend that exclusion. The Upper Tribunal held that the consultation materials could be taken into account.

This ground did not decide the case, but it allowed the court to consider the broader policy context behind the 2017 legislation.

Ground 3: allowed — the meaning of “the gaming”

The decisive ground was the proper interpretation of section 159A(4)(b), particularly the words “the gaming.”

The judges said the question was “finely balanced.” Looking at the statutory wording alone, they said it “marginally favours Jumpman’s interpretation, although not decisively so.” The section heading, “Play using the results of successful freeplay,” was more consistent with HMRC’s reading, but only slightly.

The decisive factor was the practical consequence of HMRC’s reading. If HMRC were right, an assessor would often need to trace a free spin back through dozens of earlier plays to find the original freeplay offer that started the chain. The judges said: “We do not consider that requirement emerges naturally from the language Parliament chose to enact.”

The explanatory notes to the 2017 legislation also helped. Paragraph 12 deals directly with the disputed subsections and describes the qualifying freeplay simply as one won from “gaming.” That is more natural on Jumpman’s interpretation than on HMRC’s.

In their conclusion, the judges wrote: “Whilst HMRC’s interpretation is consistent with one aspect of the legislative purpose identified in the consultation materials, we do not consider that Parliament expressed that limitation in the language of s159A(4)(b).”

What this means for other operators

A useful judgment for “always free to play” games

Law firm CMS, in a legal update by partner Stephen Hignett, said the judgment will be of significant interest to operators who offer promotional games which are, or should be treated as, always free to play.

HMRC has recently been assessing operators to RGD on exactly that kind of game. Those assessments treated the subsequent use of free spins won from the game as subject to RGD. If the Upper Tribunal’s decision is not successfully appealed by HMRC, operators should be seeking to obtain repayment of RGD where relevant, or have such assessments withdrawn.

Time limits for claims

CMS added that operators typically have four years to claim a refund. They should take the necessary procedural steps to protect their position, including appealing decisions in time.

HMRC may appeal

The judgment does not say whether HMRC will seek permission to appeal. CMS suggested HMRC may want to do so, given the judges’ own acknowledgment that the arguments pointed both ways and the likely wider impact on the industry.

The limits of the ruling

The case is not a blank cheque. The Upper Tribunal did not allow Jumpman to argue a broader point about how section 159(4) should be interpreted. That argument had not been raised in the grounds of appeal, so the tribunal expressed no view on it.

The ruling is also based on the specific statutory wording and the particular facts of the Mega Reel promotion. It does not mean that all freeplay offers are outside RGD, or that operators can ignore the freeplay rules. It does, however, set an important boundary between free games and freeplay offers.

Practical next steps for operators

Operators who think they may be affected by this decision should consider the following:

Bottom line

The Upper Tribunal’s decision is a significant win for Jumpman Gaming and a useful clarification for the UK gambling industry. The judges found that, on the wording of the legislation, free spins won from a free game are not subject to the freeplay tax treatment. The assessment of approximately £13.2 million has been reduced to nil.

The case lands at a time when UK operators are already adjusting to the higher 40% RGD rate. Some are reducing slot return-to-player (RTP) settings to recover margin. For operators facing similar assessments, the Jumpman ruling may provide an opportunity to reduce tax exposure — but only if they act quickly and protect their rights.