Jumpman Gaming wins UK tax dispute over promotional free spins

Jumpman Gaming secured a favourable ruling in the UK after the Upper Tribunal set aside key elements of a previous decision and quashed an assessment of £13.2m for Remote Gaming Duty (RGD) issued by HM Revenue & Customs (HMRC). The litigation, covering the period from July 2018 to December 2022, centred on whether winnings from promotional free spins become subject to RGD when customers use those winnings to re-bet.

What the Upper Tribunal decided on taxation of free spins

The court held that bets funded with winnings originating from promotional free spins should be excluded from Remote Gaming Duty, rejecting HMRC's position that those amounts become subject to RGD when re-bet by players. The ruling overturned parts of the First-tier Tribunal (FTT) decision, which in September 2025 had accepted HMRC's position and supported the £13.2m assessment. HMRC retains the option to appeal.

The case turned on the interpretation of the phrase "in the course of the person's participation in the gaming" as used in the tax legislation applied to RGD. Jumpman argued that the phrase should be read broadly to encompass gaming activity generally, including promotional products such as Mega Reel. HMRC maintained that the wording applied only to games where the operator waived normal participation costs, for example deposits and stakes.

Legal context: Finance Act 2014 and Finance Act 2017

The dispute involved two key statutes: the Finance Act 2014, which establishes the basis of the Remote Gaming Duty regime and defines concepts such as "gaming payments", and the Finance Act 2017, which introduced specific provisions on promotions, including free spins, bonus credits and deposit-matching offers. The Upper Tribunal's conclusion depended on a joint reading of both Acts.

The court found that bets made with funds that originate from a promotional free spin do not fall within the RGD's charging definition, at least in the specific configuration of the Mega Reel product examined in the case.

The product in dispute: Mega Reel and how the assessment was calculated

Mega Reel was the specific promotional product HMRC included in its calculation that underpinned the £13.2m assessment. HMRC argued that winnings generated by Mega Reel, once used by customers to continue playing, should be accounted for as items subject to RGD in the period under review. Jumpman Gaming, an operator based in Guernsey specialising in online slot games, challenged that interpretation before the FTT and then before the Upper Tribunal, ultimately obtaining a decision that questioned HMRC's applied assumptions.

Implications for industry and tax advisers

The ruling provides a precedent that operators, tax consultants and auditors can cite when analysing the taxation of promotions like free spins and bonus credits. The decision offers a practical reading of how RGD applies to promotional transactions and may reduce the potential tax exposure of products structured similarly to Mega Reel.

The decision arrives amid heightened attention on taxation in the sector: Remote Gaming Duty rose from 21% to 40% in April 2026. Additionally, the government has announced a new rate of General Betting Duty of 25% for online bets effective April 2027, and there are discussions about possible increases to Machine Games Duty ahead of the next budget. Those changes increase operators' and advisers' interest in clarifying the tax treatment of promotions.

What operators and advisers should do after the ruling

Operators offering promotions similar to Mega Reel should review:

• the contractual and technical structure of their promotional products;

• how they record and report winnings arising from free spins;

• the legal documentation that supports their tax treatment from July 2018 onwards.

Tax and legal advisers will now have a precedent to refer to, but they should bear in mind that HMRC may appeal the Upper Tribunal's decision. If HMRC appeals, the issue could change again.

Outstanding risks and next regulatory steps

Although Jumpman won at the Upper Tribunal, HMRC's right to appeal preserves uncertainty. The case also highlights that outcomes depend heavily on the precise drafting of the promotional product and how promotions are integrated into the real game flow. Tax authorities may regroup and seek legislative or interpretative clarifications if they believe the decision opens a route to avoidance.

The ruling will be closely watched by companies operating in the UK market and by licence-holders based in jurisdictions such as Guernsey. For related reading on regulation and the sector's tax debate see [regulation](/regulation) and pieces on commercial impact in [b2b](/b2b).

"Bets funded with winnings from promotional free spins must be excluded from the Remote Gaming Duty," said the Upper Tribunal in its pronouncement, a phrase that underpins the criterion Jumpman relied on in its defence.

The ruling is relevant both for operators designing promotions and for HMRC and the advisers representing them in tax disputes. The possibility of further appeal leaves open the chance that the issue will receive a definitive resolution in higher courts or via legislative intervention.