Free spins can cost a casino money even when a player pays nothing for the spins themselves. HM Revenue & Customs (HMRC) brought that calculation back into focus on 28 October, publishing proposed changes to the rules for freeplays, prizes and tournaments, with a planned start date of 1 April 2027.
The announcement follows Jumpman Gaming’s September victory in a dispute over approximately £13.2 million of Remote Gaming Duty (RGD). For me, the case offers a useful way to understand a bonus: its advertised value, its cash cost and its tax treatment can be three different things.
How a free spin becomes a tax entry
This issue goes back nearly a decade. Reforms applying to accounting periods beginning from 1 August 2017 brought certain promotional freeplays into the duty calculation at the amount a player would otherwise have paid. Awarding further freeplay also ceased to create a deductible prize value in the circumstances covered by those rules.
For UK casinos, the important distinction is between a promotional stake and money received. Qualifying freeplay can enter the RGD calculation as a notional stake, even though the player supplied no cash for it. Eligible cash winnings can then reduce the taxable amount.
Consider an ordinary qualifying offer of 50 spins at 20p, all used. Assume they produce £6 of winnings, credited to the player, notified and available for immediate withdrawal. This illustration uses the standard initial-freeplay treatment, separately from Jumpman’s disputed promotional arrangement.
| Item | Calculation | Amount |
|---|---|---|
| Promotional stakes used | 50 × 20p | £10.00 |
| Assumed deductible cash prizes | Credited, notified and withdrawable | £6.00 |
| Amount entering the taxable total | £10.00 less £6.00 | £4.00 |
| Duty contribution at 40% | £4.00 × 40% | £1.60 |
The £4 is a tax measure, rather than £4 of cash profit. These items feed into the operator’s calculation for an accounting period. Assuming they increase a positive taxable total, the £6 prize and £1.60 duty contribution together cost £7.60 before operating expenses. Different winnings change the calculation.
RGD rose from 21% to 40% on 1 April 2026. At the former rate, the same £4 taxable amount would have produced 84p of duty. That increase already applies; October’s announcement concerns how the taxable amount is defined.
The £13.2m dispute behind the headline
Jumpman’s case concerned assessments for July 2018 to December 2022. A customer making a qualifying deposit received a free spin on its Mega Reel promotional game. That could award spins on other games. The litigation examined both stages, including the distinction between an inherently free game and an offer waiving a charge.
Jumpman lost before the First-tier Tribunal in 2025. On 25 September 2026, the Upper Tribunal allowed its appeal: the initial welcome game remained outside the charge, while the later spins qualified for a statutory exclusion. The disputed assessments were to be reduced to nil. That outcome concerned the arrangements before the tribunal, not a general exemption for casino bonuses.
The judgment also examined internal credits and debits representing a spin value. Those entries did not establish that the customer had been relieved of a payment otherwise due. My takeaway is that a number in a system needs to match the commercial and legal substance of the offer.
The records behind the reels
A deposit puts cash into an account. A stake uses funds for play. A promotional credit can carry restrictions: a wagering requirement sets how much must be staked before funds become withdrawable. The regulator describes gambling records linked to customer accounts, with stakes and results feeding balance updates. These account events do not all represent money moving through a bank.
HMRC requires records of free or reduced-price offers, their uptake and use, and what full-price participation would have cost. Payments and prizes must also be recorded, with an audit trail supporting the duty return. Business records used for RGD generally have to remain accessible for at least four years, subject to specified exceptions.
There is a customer-facing record too. The Gambling Commission requires easy access to at least three months of account and gambling history, including relevant bonus information; at least 12 months must be available on request. Its standards allow summarised gaming information, so that does not mean every historical spin must appear individually on the customer’s screen.
What HMRC wants to change
The October proposals would replace the existing freeplay provisions with rules for “restricted plays”, covering waived gaming payments and non-withdrawable amounts supplied by the provider. An exclusion for a restricted play won from another would depend on its use for remote gaming and no alternative benefit being offered in its place.
The package also addresses tournament participation and prize deductions. Under the proposed prize definition, the published game rules would have to require the payment or benefit. The treatment of returned payments after interrupted or terminated games would also be specified.
HMRC presents the measure as reinforcing existing policy and forecasts no additional Exchequer revenue. The announced route is Finance Bill 2026-27. The September judgment interprets existing legislation; the planned April changes would alter the rules for the future.
What this could mean for casino bonuses
My reading is that operators will have to judge promotions by their full journey: the entry terms, the stakes created, the prizes offered and what becomes withdrawable. A court win on one design provides limited certainty about another design under changed legislation.
If a promotion becomes less attractive commercially, possible responses include fewer spins, a different prize structure or a smaller promotional budget. Those are scenarios to watch, rather than changes Jumpman has announced. Operators also face the Gambling Commission’s limit, effective from 19 January 2026, of ten times bonus funds for wagering requirements.
From the operator’s side, a bonus is an offer to attract or retain customers. Its prize, tax and delivery costs have to be weighed against the business it might generate. Jumpman’s case shows the stakes when the tax treatment of that offer is contested.