HMRC prepares to close free betting tax gaps

HM Revenue and Customs (HMRC) plans to rewrite the Remote Gaming Duty rules on how free bets and free spins are taxed. The plan came after the High Court cancelled Jumpman Gaming's tax debt of £3.2 million.

According to the proposals, the term 'freeplay' in the Finance Act 2014 will be replaced with 'restricted plays'. The new definitions will clarify how prizes, tournaments and restricted plays are taxed. A free play won from a free game will be excluded from the calculation if it gives the player no other benefit.

The definition of a prize is also being narrowed. A prize will count only if it must be paid or provided under the published rules of the game. Entry into free-entry tournaments will be classed as a game of chance. Refunds paid when a game is interrupted may also be treated as prizes in some cases.

The changes are due to take effect on 1 April 2027. HMRC argues that this will give operators greater predictability and protect tax revenues. Meanwhile, the Autumn Budget announced that gaming machine duty will also rise by five percentage points.