Free spins won from free game escape Remote Gaming Duty: £13.2m wiped out

An online gaming operator owes no Remote Gaming Duty on free spins used on other games after customers won them from a free Mega Reel spinNationalarchives, the Upper Tribunal (Tax and Chancery Chamber) has held in Jumpman Gaming Ltd v HMRC ([2026] UKUT 364 (TCC), 25 September 2026). The decision sets aside the First-tier Tribunal's dismissal: HMRC's assessments of about £13.2 millionNationalarchives for July 2018 to December 2022 fall to be reduced to nilNationalarchives.

Under Jumpman's Welcome Offer, a customer opening an account and making a qualifying deposit received a free spin of the Mega Reel, itself a game of chance awarding prizes including free spins on other games such as Fluffy Favourites, King Kong Cash and Chilli Heat. HMRC assessed duty on a representative sample of the further free spins used on those games.

The dispute turned on freeplay rules added by the Finance (No. 2) Act 2017. Section 159(4) of the Finance Act 2014 deems participation under an offer waiving all or part of a gaming payment to involve a gaming payment, while section 159A excludes certain later participation. The First-tier Tribunal accepted HMRC's reading of both and dismissed the appeal ([2025] UKFTT 1117 (TC)).

The Upper Tribunal upheld the first conclusion. The Welcome spin was a free game, not a game played for freeNationalarchives: the offer stated the customer would receive a free spin with no usual price identified or waived, the displayed spin value was a notional back-office figure fixable at any value without affecting the customer experience, the credit-and-debit accounting was invisible to the customer and inconsistent with free-spin treatment, and paid Mega Reel versions existed only occasionally, invitation-only, under different terms. The broader argument that section 159(4) needs no pre-existing payment obligation fell outside the pleaded ground and was not admitted.

The appeal succeeded on the exclusion in section 159A(4)(b)Nationalarchives, relieving participation under a waived-payment offer where that offer was won in the course of participation in "the gaming" with no choice of a different benefit. The Tribunal held "the gaming" means the remote gaming in section 159A(4) generally, not only earlier waived-payment gaming as HMRC contended. HMRC's reading was possible, but Parliament could have said so expressly as in section 159A(2)(a); chapter-wide usage was inconclusive; and relief could not depend on tracing a freeplay back through potentially dozens of intervening transactions, a function the words "in the course of" do not naturally perform. The section heading and paragraph 8 of the Explanatory Notes favoured HMRC only weakly, while paragraph 12, addressing subsections (4) and (5) directly, speaks of a freeplay won from "gaming" without the restriction.

The Tribunal also held the First-tier Tribunal erred in refusing to consider the 2016 consultation materials, though they proved of limited help: they addressed the conventional freeplay model and taxing the first use of freeplays only, not an initial wholly free game outside section 159(4) generating further freeplay.

Applied to the facts, the further free spins fall within the exclusion and give rise to no dutyNationalarchives, while the conclusion of no liability on the initial spin standsNationalarchives. No further findings were needed, so the Tribunal remade the decision and directed the assessments be reduced to nil under section 16(5) of the Finance Act 1994Nationalarchives.

Legal basis: sections 154, 159 and 159A of, and Chapter 3 of Part 3 (including section 167) of, the Finance Act 2014 as amended by the Finance (No. 2) Act 2017, and sections 12 and 16(5) of the Finance Act 1994.