HMRC proposes freeplay tax changes after Jumpman Gaming tribunal win

HM Revenue and Customs has published a policy paper proposing changes to how Remote Games Duty applies to promotional freeplays, in a move that attracted far less attention than the budget's headline five-point rise in Machine Games Duty.

The paper sets out an amendment to the Finance Act 2014 and would alter how the duty is applied to free bets and free spins offered by online operators, according to SBC News.

The proposal follows a tribunal defeat for HMRC weeks earlier. Jumpman Gaming had a £3.2m Remote Games Duty bill wiped clean by the Upper Tribunal, which found the duty had been wrongly applied to money re-wagered after being won through free bets.

Under the plan, the term "freeplays" used in the 2014 Act would be replaced with "restricted plays", a change HMRC says would affect operators running tournaments or other similar arrangements.

HMRC wants to set out exactly when winnings from a freeplay that are themselves generated by a separate freeplay can be kept outside an operator's tax liability, proposing that exclusion should apply only where those winnings go toward remote gaming and nothing further, such as another freeplay, is won as a result.

The paper also proposes narrowing the definition of a "prize" so that it only counts as such when payment or provision is required under a game's published rules. That redefinition could extend to cover refunds issued when a game is interrupted or terminated.

HMRC additionally wants playing in a free tournament classified as playing a game of chance, and wants its commissioners given extra powers to decide when a gaming payment counts as waived and when an entry fee paid to join a tournament should be disregarded for tax purposes.

The changes form part of the Finance Bill 2026-27 and are scheduled to take effect from 1 April 2027, the same date General Betting Duty rises from 15% to 25% and Machine Games Duty on Category B machines increases from 20% to 25%.

HMRC says the purpose of the amendments is to create "clear rules" for how restricted plays, prizes and tournaments are taxed under Remote Games Duty, which it argues would give operators "greater certainty", "reduce the scope" for disputes and protect tax revenues.

SBC News noted the timing of the proposal, coming shortly after the Jumpman Gaming ruling, suggesting HMRC is seeking to close the legal uncertainty that allowed the tribunal to overturn the operator's tax bill and to prevent similar disputes from arising again.