UK Bill to Clarify Taxation Rules for Freeplay Promotions

The United Kingdom is eyeing a new bill that would settle the matter of how freeplay promotions in gambling are treated when it comes to taxes. This follows a recent court battle against Jumpman Gaming, which won its appeal against HMRC. The Jumpman Gaming Case Set a Precedent The aforementioned case saw Jumpman Gaming, a Super Group-owned business describing itself as a leading innovator in iGaming, challenge a HMRC ruling related to its Mega Reel promotion. For reference, the Mega Reel promotion allowed customers who made a qualifying deposit to receive a free Mega Reel spin and win free spins for a variety of games. The HMRC insisted that the free spins earned from the initial spin should be treated as gaming payments and it argued that they should be subject to the UK’s remote gaming duty (RGD). As a result, the regulatory body sought to recover for promotional bets that took place between July 2018 and December 2022. Jumpman Gaming, however, secured a court win, with the Upper Tribunal saying that the exclusion for freeplay promotions, such as the Mega Reel spin, should also apply to any additional spins generated by it. The tribunal, therefore, concluded that the spins granted by the promotion are not taxable. This decision ended up saving Jumpman Gaming some GBP 13.2 million ($17.5 million) in duties. The UK Government Plans to Introduce Clarifications Now, the UK Government has teased a new finance bill that would clarify how freeplay promotions, prizes, and tournaments are treated for the purposes of the RGD. The bill was outlined in the 2026 Budget and would change existing freeplay rules. The new measure will refer to freeplays as restricted plays and will clarify how plays won from another restricted play are exempt from taxes. The new legislation will also introduce clarifications for when participation in tournaments is considered to be a game of chance. To top it all off, the planned legislation will change how prizes are defined and treated. In other regulatory news, the UK just introduced a 5% Machine Games Duty hike, much to the gaming industry’s dismay. This will effectively set the MGD at 25%, which is far from the 40% some advocated for, but still an unpleasant development for the sector. Stakeholders expressed disappointment in the change, saying that it is likely to lead to job cuts and a less competitive legal gaming sector.