HMRC Sets Out New Remote Gaming Duty Rules for Free Plays From April 2027

^{HM Revenue & Customs has published a tax note on how Remote Gaming Duty will treat free plays, prizes and tournaments. (Photo: HM Revenue & Customs / Wikimedia Commons)}

HM Revenue & Customs has published the detail of a planned change to how Remote Gaming Duty (RGD) treats free plays, prizes and tournaments, with the new rules due to take effect on 1 April 2027. The measure will be written into the Finance Bill 2026-27 and was set out in a tax information and impact note published on 28 October 2026, the day of the Budget.

It lands alongside the Budget's other gambling tax changes, including the move to a 25% machine games duty rate on higher-stake machines from the same month. Unlike that rise, HMRC says this measure is not expected to have an Exchequer impact.

Free Plays Become ‘Restricted Plays’

The legislation will refer to what the industry calls free plays as ‘restricted plays’. Under the plan, a restricted play will cover offers that waive all or part of a gaming payment, and non-withdrawable money provided by or on behalf of the gaming provider.

The note also deals with chains of free plays. Where a restricted play is won through the use of another restricted play, the won play will be excluded when calculating an operator's RGD profits. That exclusion applies where the won restricted play is used for remote gaming and no other benefit is offered in its place.

HMRC says the point of the change is to establish clear rules for restricted play, prizes and tournaments. It says the revisions will give operators greater certainty, reduce the scope for dispute and protect future revenues.

Tournaments and Prizes

The measure also amends the rules on when taking part in a tournament is treated as playing a game of chance. In addition, it changes the meaning of ‘prize’, so that something only counts as a prize where it must be paid or provided under the published rules of the game.

The note adds that the legislation will specify when the return of a gaming payment after a game is interrupted or ends early can be treated as a prize for RGD calculations. HMRC's Commissioners will also get powers to make regulations on when a gaming payment is, or is not, treated as waived, and on when an amount paid to enter a tournament is disregarded.

HMRC describes the change as ‘an upstream compliance measure intended to reinforce existing policy’ and says it is not a scoring measure.

Why HMRC Is Acting

HMRC says different interpretations of the free play rules have arisen since the Finance Act 2017 amended the Finance Act 2014 provisions on RGD. Current law on free plays and prizes sits in sections 155 to 160 of the 2014 Act, and the tournament provisions are in section 188. The Finance Bill will replace section 159A with new provisions for restricted play.

For operators, the practical question will be how their bonus and promotional structures fit the new definition before 1 April 2027, particularly where one free play can generate another. The detailed regulations the Commissioners will be able to make on waived payments are likely to matter as much as the primary legislation.

The note follows a year of heavy change to online gambling taxation, which began when the Chancellor unveiled the biggest shake-up to gambling taxes in a decade. The Finance Bill's progress through Parliament will show whether the restricted play wording changes before it becomes law.