Shares of Indian gaming and casino firms slid on Wednesday. This came after the government imposed a 28% tax on the funds collected by online gaming companies from customers. The tax was announced in the country’s annual budget on Tuesday. It applies to all online gaming, including skill-based games such as rummy and poker, as well as casino games such as roulette and blackjack.
The gaming industry has criticized this move. They argue that the tax will burden businesses and hinder growth. Abhishek Singh, CEO of Nazara Technologies, one of India’s largest gaming companies, stated, “The 28% tax is a huge blow to the online gaming industry. It will make it very difficult for companies to operate and will ultimately lead to higher prices for consumers.”
Other industry representatives share similar concerns. They believe that the tax will make India less competitive in the global gaming market. Siddharth Jain, CEO of Onmobile Global, another major Indian gaming company, said, “The tax will make it difficult for Indian companies to compete with international players. It will also make it more difficult for Indian gamers to access the best games.”
The government’s rationale for the tax is to raise revenue and curb gambling addiction. However, industry representatives argue that the tax will have the opposite effect. They believe it will drive players to unregulated offshore markets. Abhishek Singh expressed this concern, stating, “The tax will only push people to play on illegal sites. It will not achieve the government’s goal of curbing gambling addiction.”
The new tax is expected to take effect on October 1, 2023. The industry’s response to the tax regime remains to be seen. However, it is evident that the move has shaken the gaming industry in India.
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