A landmark UK legal decision has reduced an online casino company’s tax bill from £13.2m to nothing, at least for now, all amidst yet another fiery debate around gambling taxation in the country.
Jumpman Gaming, a Guernsey company which mainly provides slots, secured a favourable ruling from the Upper Tribunal last week in its case against a Remote Gaming Duty (RGD) online gaming tax bill it was issued by HM Revenue and Customs (HMRC).
The case concerned promotional free spins, and specifically the money won from these spins. For many, the logic would seem obvious – how can a promotional free spin which an operator gives a customer for free be taxed?
The issue relates to re-wagering. As money won by customers via free spins was often subsequently re-gambled on the online casino, HMRC saw this as revenue that could be taxed. Jumpman saw things differently.
HMRC had issued Jumpman the £13.2m RGD bill covering July 2018-December 2022. After assessing the bill, Jumpman took umbrage with the inclusion of one of its promotional products, ‘Mega Reel’, within it.
Jumpman first took its case to the First-tier Tribunal (FTT), which sided with HMRC in September 2025. It then took its case to the Upper Tribunal, which in a surprising case has decided to reverse two of the FTT’s decisions.
Specifically, the Upper Tribunal found that the FTT erred by excluding 2016 pre-legislative consultation materials from consideration and that it had interpreted the phrase “the gaming” in the law too restrictively to include further free spins won.
What does the legislation say?…
All licensed gambling operators in the UK are subject to the terms of the 2005 Gambling Act, which sets out the requirements for licensing and general conduct. The Act was reviewed between 2020-2023, leading to some more restrictions and rules for operators.
When it comes to taxation, however, there are a set of financial acts which govern how and what HMRC can apply different taxation rates to. These are the Finance Act 2014 and the Finance Act 2017.
The 2014 legislation is the main piece of legislation governing duties like RGD, imposed on operator profits. This contains the definition of gaming, profit valuations and the definition of ‘gaming payments’ on these profits.
The 2017 Act, meanwhile, addresses promotional offers, and so had arguably the most significance to this case. The Act mentions free spins, bonus credits and matched deposits, and sets out what is excluded when it comes to taxation across re-wagered funds.
…and how is it applied?
A particular section of the 2014 Act which was significant in this case was the above mentioned definition of “the gaming” in the section applying to any offer “that has been won in the course of the person’s participation in the gaming”.
Jumpman stated that this referred to the practice of gambling generally, including Mega Reel, but HMRC argued that this refers only to games where an operator has waived the usual cost of participation, i.e. depositing and staking.
The FTT sided with HMRC in the September ruling because Mega Reel is a free-to-play game. However, the Upper Tribunal has now ruled that money wagered as a result of free spins won via an initial promotional free spin should be exempted from RGD.
As with any legal case involving the gambling industry, the significance of this one is that it provides clarity and will give operators, the tax authorities and legal authorities a precedent to work on in future interpretations of gambling taxation.
And while it is unrelated to the current conversations around RGD, which was increased from 21% to 40% in April 2026 much to the industry’s chagrin, and by extension to Machine Games Duty (MGD), the decision comes at a time when taxation is one of the biggest topics on the minds of iGaming executive and finance teams.
HMRC also still has the right of appeal to the Upper Tribunal’s ruling.
