Jumpman Gaming has won its appeal against £13.2 million of Remote Gaming Duty (RGD) assessments on promotional free spins, after the Upper Tribunal (Tax and Chancery Chamber) reduced HMRC’s bill to nil.
Upper Tribunal Judges Swami Raghavan and Guy Brannan handed down the decision in Jumpman Gaming Ltd v The Commissioners for HMRC [2026] UKUT 364 (TCC) on 25 September 2026. It overturns a 2025 First-tier Tribunal (FTT) ruling that had backed HMRC on the free spins.
The assessments covered free spins Jumpman gave to new customers between July 2018 and December 2022. Jumpman runs a large portfolio of brands in the UK online casino market and has been majority-owned by Betway parent Super Group since 2022.
The Mega Reel welcome offer
The dispute concerned Jumpman’s welcome offer. New customers who made a qualifying deposit received one free spin on the Mega Reel, which is itself a game of chance.
Prizes on the Mega Reel included free spins on other games. HMRC charged duty on those later free spins. Jumpman argued that neither the Mega Reel spin nor the spins it paid out created any RGD liability.
How the freeplay rules apply
RGD is charged on an operator’s gross gaming profits. Freeplay provisions, added to the Finance Act 2014 by the Finance (No. 2) Act 2017, bring free spins into that charge: where a player takes part in gaming because the operator waives the payment, the waived amount is treated as a gaming payment.
Sections 159A(4) and (5) then exclude certain free spins from the charge. The case turned on two words in section 159A(4)(b): “the gaming”.
The FTT had found that the Mega Reel spin was a free game with no payment capable of being waived, so it carried no duty. It still held that duty was due on the free spins customers won from it.
HMRC’s tracing argument
HMRC argued that “the gaming” referred only to waived-payment gaming. Its reading required each free spin to be traced back through any intervening transactions to its source.
Because the Mega Reel spin was a free game with no waived payment, the free spins it awarded fell outside the exclusion on HMRC’s case and stayed taxable.
Jumpman argued that “the gaming” meant remote gaming in general, with no tracing exercise needed.
The Upper Tribunal’s reading
The tribunal accepted that HMRC’s construction was linguistically possible but preferred Jumpman’s. It pointed out that Parliament referred to waived-payment gaming expressly elsewhere in the freeplay provisions and did not do so in section 159A(4)(b).
It also found no support in the statutory wording for the extended tracing exercise HMRC’s reading required.
The judges considered consultation material behind the freeplay rules, which proposed taxing only the first use of a freeplay. They gave it limited weight because it dealt with conventional freeplay models.
With the welcome spin carrying no liability and the later free spins inside the statutory exclusion, the tribunal reduced the assessments to nil under section 16(5) of the Finance Act 1994.
Higher duty rate on free spins
RGD stood at 15% of gross gaming profits at the start of the assessment period and rose to 21% in April 2019. It went up again to 40% on 1 April 2026, close to doubling the rate UK online casino operators pay.
At 40%, a free spin brought into the charge costs an operator almost twice the duty it would have at 21%. Free spins are a standard part of UK online casino welcome offers, so how the freeplay exclusions apply to spins won inside a promotion affects duty bills across the sector.
The Betting and Gaming Council (BGC) is still lobbying politicians over the 40% rate.
Appeal route
HMRC can seek permission to appeal to the Court of Appeal, which hears appeals from the Upper Tribunal on points of law. Unless the Court of Appeal takes a different view, the Upper Tribunal’s reading of section 159A(4)(b) binds the FTT.
The ruling covers other operators whose welcome offers pay out free spins through an initial free game. If HMRC appeals and wins, spins won that way would come back into the charge, at the 40% rate that now applies.
Source: Upper Tribunal (Tax and Chancery Chamber)
