HMRC Moves to Rewrite Freeplay Tax Rules After £3.2m Jumpman Defeat

HMRC has put out a policy paper that proposes amending the 2014 Finance Act, and the target is how Remote Games Duty treats freeplays: the free bets and free spins operators hand out as promos. It lands weeks after Jumpman Gaming had a £3.2m tax bill wiped clean by the Upper Tribunal. At issue in that case was whether RGD should apply to money re-wagered after being won through free bets. The tribunal said no.

Coincidence? Unlikely. HMRC says it wants clear rules for taxing restricted plays, prizes and tournaments under RGD, which it argues gives operators more certainty, cuts down on disputes and protects revenue. Given the size of the Jumpman write-off, that last point matters.

The paper would rename "freeplays" in the 2014 Act as "restricted plays". Operators running tournaments and similar arrangements would fall under the amended law. HMRC also wants to spell out exactly when a freeplay won from another freeplay can be left out of an operator's tax bill. The exclusion applies where a won freeplay is used for remote gaming and no other benefit has been offered as a result of that use, which means no further freeplay has been won through it.

The "prize" definition changes too. Something counts as a prize only where it must be paid or provided under a game's published rules. A returned payment after a game is interrupted or terminated could also be treated as a prize. On top of that, HMRC wants free tournament entry classed as playing a game of chance, and it wants commissioners to get more powers over when a gaming payment is or isn't treated as waived, and when money paid to enter a tournament is disregarded.

All of this sits in Finance Bill 2026-27 and would start on 1 April 2027. That date is crowded already. General Betting Duty climbs from 15% to 25% the same day, and Machine Games Duty on Category B machines rises from 20% to 25%. The five-point MGD increase was the Budget's headline. The RGD amendment has pulled in less attention, though its scope is narrower and it bites more directly on how promotions are built.

For operators, the question is how much of the freeplay chain stays outside the tax base. Under the draft rules, a free bet that throws off another free bet no longer qualifies for exclusion. That's tighter than the line the tribunal drew in Jumpman, where applying RGD to re-wagered free bet money was held to be wrong.

Tournament economics get pulled in as well. Calling free tournament entry a game of chance brings those formats into RGD territory, and the proposed commissioner powers over waived payments would hand HMRC a discretion operators haven't had to plan around before.

Two numbers to watch from here. The first is the £3.2m Jumpman figure, now the benchmark for what HMRC is trying to stop happening again. The second is 1 April 2027, when RGD reform, the GBD rise to 25% and the MGD rise to 25% all hit on the same day. Anyone pricing bonuses or scheduling tournaments past that date has three moving tax inputs to model at once.