Budget 2026 contains targeted changes to the Remote Gaming Duty rules on freeplays, prizes and tournaments. Two appear to seek to reverse HMRC losses in the recent litigation in Jumpman and L&L Europe. The purpose of the third, concerning tournament participation, is less clear but may raise an intriguing question for commercial prize-draw operators.

HMRC's Budget 2026 announcement on Remote Gaming Duty is relatively brief, but several of the apparently technical amendments look significant when considered in the light of recent disputes over the boundaries of the legislation. 

Freeplays: the response to Jumpman 

The Government intends to replace the existing s159A FA 2014 rules with new provisions dealing with “restricted play”, covering both free play offers with waived gaming payments and non-withdrawable money provided by or on behalf of the gaming provider. The changes will address situations where restricted play is itself won from restricted play. 

The timing is notable. 

In Jumpman Gaming Ltd v HMRC [2026] UKUT 364 (TCC), the Upper Tribunal rejected HMRC's narrow construction of the existing s159A rules. It held that free spins won from earlier remote gaming could fall within the statutory exclusion even though the earlier gaming was a free-to-play game and did not trigger a deemed gaming payment under s159(4). The result was that neither the original free spin nor the subsequent free spins in issue generated RGD liability. 

See here for our analysis of the Jumpman decision. 

Budget 2026 will replace the provisions at the centre of that dispute, creating a new concept of “restricted play” covering freeplays that waive all or part of a gaming payment and non-withdrawable money. The measure appears to restrict the exclusion for subsequent restricted plays to those won through the use of another restricted play. That would reflect the interpretation for which HMRC argued unsuccessfully in Jumpman. 

Prizes: the response to L&L Europe 

A second amendment concerns what counts as a “prize”. 

In L & L Europe Ltd v HMRC [2024] UKFTT 144 (TC), the FTT held that cashback paid to customers after they had lost deposited funds was deductible expenditure on prizes. It concluded both that the cashback could constitute a “prize … won” and, alternatively, that it could be treated as the return of part of a gaming payment under s160(3). 

The Budget announcement proposes to tighten this area. In particular, something will only constitute a prize where it is required to be paid or provided under the published rules of the game. 

That seems plainly relevant to the reasoning in L&L Europe. The decision is an FTT decision rather than binding precedent, but the proposed amendment appears designed to prevent its broader approach to prizes being replicated under the new rules. 

Tournaments: one to watch for prize draws? 

The third change is less clear. 

Existing FA 2014 s188 provides, among other things, that a game requiring two or more participants is not a “game of chance” for RGD purposes where no amounts are “paid or required to be paid” for entitlement to participate, or otherwise in connection with participation. That provision is potentially important to commercial prize draws offering a free entry route. 

The Government now says it will amend the legislation determining when participation in a tournament amounts to playing a game of chance, alongside a power to introduce regulations dealing with amounts paid or required to be paid for participation in tournaments that should be disregarded for RGD purposes. 

Why that change is being made, and exactly what arrangements it is intended to catch, are not obvious from the short policy announcement. 

There is a potentially interesting read-across to commercial prize draws, particularly given the separate dispute over the VAT treatment of operators offering both paid and free entry routes. The VAT treatment of this model is currently before the FTT in Omaze UK Ltd v HMRC. 

One issue under discussion in the sector has been whether the value of the supplies made for VAT could reflect entry receipts less prize costs. The difficulty is identifying a statutory basis for reducing the consideration for the VAT supply by the cost of prizes. 

If some prize-draw arrangements were instead capable of falling within the statutory concept of remote gaming, the analysis could potentially be different: RGD operates on gaming profits calculated by reference to gaming payments less deductible prizes. That could produce an economically similar result through a quite different statutory route. 

But it would be premature to speculate further. The Budget announcement is unclear and the Finance Bill has not yet been published. Until we see the proposed amendments to s188, the significance of the tournament announcement remains an interesting question.