Jumpman Gaming v HMRC: Upper Tribunal wipes out £13.2m remote gaming duty on free spins

The Upper Tribunal has reduced to nil assessments of approximately £13.2 million in Remote Gaming Duty (RGD) against an online gaming operator. It held that free spins won from a promotional "welcome" game fell within the statutory exclusion in section 159A(4) and (5) of the Finance Act 2014.

In Jumpman Gaming Ltd v The Commissioners for HMRC [2026] UKUT 364 (TCC), Judges Swami Raghavan and Guy Brannan allowed the operator's appeal in part against a First-tier Tribunal (FTT) decision that had upheld HMRC's construction of the freeplay provisions introduced by the Finance (No. 2) Act 2017.

Background

Jumpman ran online games of chance resembling electronic fruit machines. Under its "Welcome Offer", a customer who opened an account and made a qualifying deposit received a free spin of the "Mega Reel", itself a game of chance. The Mega Reel could award prizes including free spins on other games.

HMRC assessed duty for periods between July 2018 and December 2022. The dispute concerned two stages: the initial Mega Reel spin, and the further free spins won from it.

Section 159(4) deems a gaming payment to arise where a person participates in reliance on an offer waiving all or part of a gaming payment. Section 159A(4) and (5) disapply that treatment where the freeplay offer "has been won in the course of the person's participation in the gaming" and no alternative benefit was offered.

The welcome spin

Jumpman argued that the welcome spin was a game played for free, so that a deemed payment arose under section 159(4). The FTT had found instead that it was a free game, meaning there was no gaming payment capable of waiver. The Upper Tribunal treated this as an Edwards v Bairstow challenge and dismissed it.

The FTT had been entitled to find that the displayed spin value was a notional internal figure rather than a participation price. It was also entitled to give limited weight to back-office accounting entries invisible to the customer, and to treat occasional invitation-only paid versions of the Mega Reel as separate games on different terms. The tribunal refused to allow a broader challenge to the FTT's construction of section 159(4), raised late in Jumpman's skeleton argument, as it fell outside the pleaded ground.

Consultation materials

The FTT had declined to consider HMRC's 2016 consultation materials on the basis that they were not before Parliament. HMRC did not defend that approach. Applying R (O) v Secretary of State for the Home Department and For Women Scotland Ltd v Scottish Ministers, the Upper Tribunal held that admissibility does not depend on whether material was placed before Parliament, and that ground succeeded.

Meaning of "the gaming"

The central issue was whether "the gaming" in section 159A(4)(b) meant remote gaming generally, or only waived-payment gaming as HMRC contended. The tribunal accepted that HMRC's reading was linguistically possible and that the section heading and paragraph 8 of the Explanatory Notes offered it some support.

It nonetheless preferred Jumpman's construction. Parliament had expressly referred to waived-payment gaming elsewhere in section 159A but not in subsection (4)(b). Paragraph 12 of the Explanatory Notes, directed specifically at the disputed provisions, referred simply to a freeplay won from "gaming". Most significantly, HMRC's reading required "in the course of" to support an extended tracing exercise through potentially dozens of intervening transactions, which the tribunal did not consider the enacted language naturally conveyed.

The consultation materials, which proposed "taxing the first use of freeplays only", were of limited help. They addressed the conventional freeplay model rather than a wholly free game that falls outside section 159(4) but generates further freeplay.

Because the welcome spin gave rise to no liability and the further free spins fell within the exclusion, the tribunal remade the decision and reduced the assessments to nil under section 16(5) of the Finance Act 1994.