127 Indian Gambling Companies Unite Against 28% GST Imposition

In an unprecedented move, 127 gambling companies operating in India have joined forces to pen an open letter addressed to the country’s government, urgently requesting a re-evaluation of its recent decision to impose a 28% Goods and Services Tax (GST) on online games, casinos, and horse racing.

As per the new regulations, gambling companies operating in India are now burdened with a 28% tax on the total amount collected from bettors. The implications of this decision are far-reaching, and the letter strongly emphasizes the potentially disastrous repercussions. It raises concerns about the probable closure of numerous businesses and startups that lack the financial reserves to endure such a steep rise in taxes.

The letter highlights a significant concern that this move may inadvertently encourage illegal offshore gambling operators to flourish and, in turn, attract Indian users. The ultimate result of this, as emphasized in the letter, would not be an optimal collection of taxes or the growth of legality in this industry.

It is crucial to consider the scale of the online gaming market in India, which is estimated to be worth a staggering $20 billion.

The industry generates approximately $2.5 billion in revenue annually, contributing around $1 billion in taxes. The experts’ forecasts are even more impressive, projecting a remarkable cumulative annual growth rate (CAGR) of 30%, which indicates a potential revenue surge to $5 billion by the year 2025.

Furthermore, while the Indian online gaming market continues to grow, the number of Indian online gamers has significantly increased from 360 million in 2020 to over 420 million in 2023. These figures illustrate the industry’s importance and impact on the economy and public interest.