The Indian government recently levied a 28% tax on profits made by online gambling companies from their clients, dealing a huge blow to a booming $1.5 billion industry that has grown in popularity and drawn foreign investment. Representatives from the iGaming industry, on the other hand, have expressed their dissatisfaction, expressing concerns about the impact on their earnings and the potential of passing on the increased charges to users.
Finance Minister Nirmala Sitharaman defended the move, saying it was taken after extensive consultation with several states and that the objective was not to hurt the business. The fundamental impetus for the government’s action derives from concerns about financial losses and the risk for addiction linked with gaming applications, particularly those endorsed by sports champions in India, where cricket is extremely popular.
Representatives from the iGaming business have expressed concerns about the recently imposed tax. Aaditya Shah, Chief Operating Officer at IndiaPlays, emphasized the major issues that the 28% tax rate will bring, affecting gaming enterprises’ financial flows. The All India Gaming Federation’s CEO, Roland Landers, criticized the judgement as unlawful and unreasonable, suggesting that it could lead to the death of the whole Indian gaming industry, resulting in job losses. Landers further claimed that the only people who would benefit from such a shift would be anti-national unlawful offshore sites.
Online gaming apps, particularly those related to cricket, have been critical in bringing significant investments to the Indian gaming industry. Dream11, a $8 billion cornerstone sponsor of the Indian national cricket team sponsored by Tiger Global, is one such example. Dream11 provides fantasy cricket games in which participants may design their own teams for a little price and compete for large cash rewards. Peax XV, formerly known as Sequoia Capital India, has invested in another app, MPL.
According to the Redseer consultancy, revenue from fantasy gambling platforms increased by 24% during the popular Indian Premier League (IPL) cricket matches, topping $342 million. More over 61 million players actively participated in various platforms, illustrating the online gaming industry’s expanding involvement and financial potential.
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