Jumpman Gaming, a Super Group-owned business describing itself as a leading innovator in iGaming, has scored a major triumph as the UK’s Upper Tribunal ruled in the company’s favor in a dispute with HM Revenue & Customs (HMRC).
HMRC Claimed That Jumpman Owed Millions in Taxes
Jumpman Gaming had been locking horns with HMRC over a past promotion that saw the company offer free spins to its customers. The so-called Mega Reel promotion allowed customers who made a qualifying deposit to receive a free Mega Reel spin. The promotion would then grant them free spins for a variety of games.
According to HMRC, the free spins earned from the initial spin should be treated as gaming payments. Because of that, it argued that such spins should be subject to the UK’s remote gaming duty (RGD).
As a result, HMRC sought to recover taxes for promotional bets that took place between July 2018 and December 2022.
Jumpman Will Not Have to Pay Taxes on the Free Spins
After examining the matter, the Upper Tribunal concluded that HMRC’s interpretation of the Finance Act’s Section 159A was not correct and that the exclusion for freeplay promotions, such as the Mega Reel spin, should also apply to any additional spins generated by it.
Since the Upper Tribunal had already concluded that the original Mega Reel promotion was not taxable, it ruled that the subsequent spins should not be taxable either. This effectively saves Jumpman from paying GBP 13.2 million ($17.5 million) in duties.
The tribunal added that HMRC’s interpretation could have resulted in problems, since it would have required operators to track long freeplay transaction histories.
At the same time, the ruling provided clarification on how freeplay promotions should be treated and could potentially help other operators avoid promotion-related taxes.
It should be noted, however, that HMRC could still try to appeal the decision.