India’s online gaming industry generates $822 million in six months

Sudhanshu Ranjan September 20, 2024

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India’s online gaming industry generates $822 million in six months

The online gaming industry in India has generated over $800 million in revenue in just six months since the government implemented a 28 percent Goods and Services Tax (GST) on real-money online gaming. Despite the significant revenue boost, concerns about the long-term impact on the industry, players, and growth prospects linger.

Rapid revenue surge

For online gaming, the 28 percent tax is levied on player deposits, meaning that before gamers can start playing, a large portion of their money is directed to the government. Between October 2023 and March 2024, the Indian government collected $822 million in tax revenue from real-money online gaming platforms. This represents a significant leap compared to the $160 million collected in the six months prior to the tax hike, amounting to a fivefold increase. The average monthly revenue reached $137 million during this period, highlighting the financial potential of the industry, even under the weight of the new tax.

In the same six-month period, the casino industry contributed $25 million in tax revenue, marking a 30 percent increase. This suggests that while online platforms are growing at a faster rate, traditional forms of gaming continue to hold their own in India’s gambling landscape.

The $822 million collected in taxes suggests that players deposited approximately $3 billion into online gaming platforms over the six months.

Impact on gaming industry

For gaming companies, the new tax regime presents both challenges and opportunities. On one hand, the increase in tax revenue signals a booming industry, but on the other, the 28 percent levy on deposits cuts into players’ spending power, which could affect platform profitability.

One ongoing debate in the Indian gaming community is the distinction between skill-based and chance-based games. Skill-based games, such as fantasy sports, often argue that they should be taxed differently than games of chance like lotteries or slot games. However, under the current tax regime, both categories are subject to the same 28 percent GST.

The future of online gaming in India is both exciting and uncertain. On one hand, the rapid growth of the market shows no signs of slowing down. On the other hand, the 28 percent GST presents a significant hurdle that the industry must overcome to maintain its momentum. In the coming years, we can expect to see further innovations and adjustments as companies and players navigate this new landscape.

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