India Cracks Down on Online Gambling with 28% Tax Hike

^{Nirmala Sitharaman, Finance Minister of India}

India’s Goods and Services Tax Council (GST) has decided to hike the tax rate on online gaming, casinos, and horse racing from 18% to 28%, in a move that could hurt the booming gaming industry.

The decision was announced by Indian Finance Minister Nirmala Sitharaman during the GST meeting.

“Our intention is not to end online gaming, casino, horse racing. But all these have become so complex that go this route or go that route, each route has transparency to a certain extent, but after that, it is opaque”, Sitharaman said.

The GST wants to stop gambling activities from being disguised as regular video games. So, the tax will be the same for games where skill or chance determines the winnings.

“This decision will wipe out the entire Indian gaming industry and lead to lakhs of job losses, and the only people benefitting from this will be anti-national illegal offshore platforms,” said Roland Landers, CEO of The All India Gaming Federation.

Online gaming is one of the fastest-growing segments of the Indian online business. The current market size is $1.5 billion, and analysts predict explosive growth.

India has about 659 million smartphone users and leads the world in game downloads with 15 billion downloads in 2022, beating the U.S. and China combined.