UK Plans New Remote Gaming Duty Rules for Free Spins and Casino Bonuses

The proposed changes focus on how operators classify promotional gaming activity when calculating taxable profits.

Under the official HMRC policy paper, the existing definition of free plays will be replaced with restricted plays.

These will include offers that partially or fully waive gaming payments, along with non-withdrawable promotional funds provided by operators.

The legislation also clarifies what happens when players win additional free spins through an existing promotional offer.

Such rewards may be excluded from RGD calculations when they are used for remote gaming, and no alternative benefit is offered in their place.

HMRC said:

These changes will provide greater certainty for operators, reduce the scope for dispute and protect future revenues.

The clarification is particularly relevant to online casinos offering promotional features that award additional free spins across multiple games.

The proposals also address how tournaments and prizes are treated under Remote Gaming Duty. HMRC intends to clarify when tournament participation qualifies as playing a game of chance for tax purposes.

The revised legislation will define a prize as something the game’s published rules require the game operator to pay or provide. It will also set out when a returned gaming payment after an interrupted or terminated game can be treated as a prize.

These changes aim to reduce uncertainty around promotional tournaments, gaming rewards and related tax calculations.

The announcement comes just over a month after Jumpman Gaming won a £13.2 million Remote Gaming Duty appeal against HMRC.

In September, the Upper Tribunal ruled that additional free spins awarded through Jumpman’s promotional Mega Reel could qualify for an exclusion under existing legislation. The decision overturned part of an earlier ruling and reduced the disputed tax assessments to nil.

Although HMRC’s latest policy paper does not explicitly identify Jumpman as the reason for the changes, it acknowledges that differing interpretations of existing freeplay legislation have created uncertainty.

The new provisions aim to clarify these rules for future tax calculations rather than increase Remote Gaming Duty further.

The proposed amendments come at a challenging time for the UK online gambling market.

The UK’s Remote Gaming Duty rate increased from 21% to 40% in April 2026, making promotional spending and tax compliance increasingly important commercial considerations.

Operators may need to review how they award free spins, whether rewards can be exchanged for other benefits, and how they record promotional activity for tax purposes.

The changes also sit alongside wider regulatory attention on casino incentives. Recent UK Gambling Commission research on gambling promotions highlighted the importance of making relevant conditions and risks understandable to players.

However, HMRC expects the tax amendments themselves to create only negligible administrative costs, with no ongoing compliance costs or additional Exchequer revenue anticipated.

The legislation has not yet been enacted. Its final wording will determine how operators apply the revised definitions when the measures are scheduled to take effect in April 2027.