Jumpman Gaming wins UK dispute over taxation of free online casino spins
The court has ruled in favour of the operator over the question of whether re-wagered winnings from free online casino spins are subject to Remote Gaming Duty.
Key takeaways:
- Jumpman Gaming has won a major UK tax dispute after the Upper Tribunal overturned key parts of an earlier ruling, effectively removing a £13.2m Remote Gaming Duty (RGD) assessment issued by HMRC over the treatment of promotional free spins.
- The case centred on whether winnings generated from free spins become subject to RGD when customers use those winnings to place further bets. HMRC argued they should be taxed when re-wagered, while Jumpman maintained they should remain outside the scope of the duty.
- The Upper Tribunal ruled that stakes funded by winnings from promotional free spins should be excluded from RGD, creating an important precedent for how promotional gambling products may be treated under UK tax law. However, HMRC still has the option to appeal.
UK.- A UK tax dispute involving online casino operator Jumpman Gaming has resulted in a victory for the company. A tribunal ruling has effectively eliminated a £13.2m Remote Gaming Duty (RGD) assessment issued by HM Revenue & Customs (HMRC).
The Guernsey-based operator, which primarily offers online slot games, secured a favourable judgment from the Upper Tribunal after challenging an HMRC tax bill covering the period from July 2018 to December 2022. The case revolved around the treatment of promotional free spins and the winnings generated from them. While free spins are awarded to customers without charge, the dispute focused on what happens to any winnings generated from those promotions when customers subsequently use those funds to continue gambling.
HMRC argued that winnings derived from promotional free spins could become subject to Remote Gaming Duty once they were re-wagered by customers. Jumpman disagreed, maintaining that such winnings should remain outside the scope of the tax. The dispute specifically concerned one of the company’s promotional products, known as Mega Reel, which HMRC included when calculating the £13.2m tax assessment.
The matter was initially heard by the First-tier Tribunal (FTT), which ruled in favour of HMRC in September 2025. However, Jumpman appealed the decision to the Upper Tribunal, which subsequently overturned key elements of the earlier ruling.
The case centred on the interaction between two pieces of UK tax legislation: the Finance Act 2014 and the Finance Act 2017. The former forms the foundation of the UK’s Remote Gaming Duty regime, setting out how gaming profits are calculated and defining key concepts such as gaming payments. The latter introduced provisions dealing specifically with promotional offers, including free spins, bonus credits and matched deposit incentives, and clarified how certain promotional gambling transactions should be treated for tax purposes.
A critical issue in the case was the interpretation of wording in the legislation referring to amounts won “in the course of the person’s participation in the gaming”. Jumpman argued that the phrase should be interpreted broadly to cover gambling activity generally, including promotional products such as Mega Reel. HMRC, by contrast, contended that the wording applied only to games where operators had waived the normal participation costs, such as deposits and stakes.
The First-tier Tribunal accepted HMRC’s interpretation, partly because Mega Reel itself was structured as a free-to-play game. The Upper Tribunal, however, concluded that stakes funded by winnings from free spins awarded through an initial promotional free spin should be excluded from Remote Gaming Duty.
The ruling potentially provides new clarification for the industry as a whole about how promotional gambling products should be treated under UK tax law, providing a precedent for operators, advisers and tax authorities to reference in future disputes. Nevertheless, HMRC still has the option of appealing the Upper Tribunal’s decision, meaning the final outcome of the dispute may not yet be settled.
The judgment arrives at a time when gambling taxation is under intense scrutiny across the UK industry. Remote Gaming Duty was increased from 21 per cent to 40 per cent in April 2026. A new General Betting Duty rate of 25 per cent for online bets is to come into force from April 2027, and the government is reportedly considering an increase to Machine Games Duty in government’s upcoming Budget.
FAQs
Why did HMRC issue a £13.2m tax assessment against Jumpman Gaming?
HMRC argued that winnings generated from promotional free spins became liable for Remote Gaming Duty when customers used those winnings to continue gambling, leading to a £13.2m assessment covering July 2018 to December 2022.
How did Jumpman Gaming get its tax assessment quashed?
The Upper Tribunal sided with Jumpman Gaming and concluded that stakes funded by winnings from promotional free spins should be excluded from Remote Gaming Duty, overturning key aspects of an earlier First-tier Tribunal ruling.
What does the promotional spins tax ruling mean for the gambling industry?
The judgment potentially provides fresh guidance on the tax treatment of free spins, bonus offers and other promotional gambling products. It could serve as an important reference point for operators, advisers and HMRC in future disputes as gambling taxes to rise in the UK. However, HMRC may still appeal against the ruling.
