The licensed online and land-based gambling industry was dealt a harsh blow last December when the government approved and implemented an exorbitant new tax regime. The 54th meeting of the Goods and Services Tax (GST) Council took place on 10 September to discuss, amongst other things, whether the gambling tax would be reversed or at least minimised—spoiler alert: it wasn’t.

Join us as we delve into the council's decision to maintain the inflated tax requirement, how the industry feels about it, and where the market could be headed soon.

 Any Hope of Relief Dashed

Leading up to the six-month review of India’s ill-advised gambling tax increase, industry experts hoped for some form of relief. However, Nirmala Sitharaman, India’s Minister of Finance and Corporate Affairs, was quick to dissuade any such talk, clarifying that the tax will stay in place due to its early success.

During the GST Council meeting, it was revealed that the newly implemented levy had increased online casino tax revenues to nearly €745,000 (₹6,909 Crore), a 412% value surge, despite only being implemented approximately six months ago.

The returns from the land-based gambling sector were far less valuable than those from online operators, delivering only a 30% revenue increase worth around €131,000 (₹1,214 Crore).

Does Trouble Lie Ahead?

While these early results show increased government revenue, it remains to be established whether licensed online casinos can sustain their business interests in the medium to long term.

When pressed about the response of the broader industry to the tax increase and the potential problems it represents,  Minister Sitharaman was hesitant to commit either way. Instead, she chose to answer the question like a politician saying:

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“The council heard the facts, and that’s where it was left. It was more of a presentation of the current situation. That was a promise that was given to review [the regime] after six months. It’s been more than six months now, and we have given a picture [of the sector].”

The most likely next step is for casino operators to pass the costs created by the 28% tax to the consumer through fees and by reducing the money spent on bonuses, promotions and other incentives.

However, this runs the risk of making licensed operators unappealing to local players, opening the door to unregulated gambling sites where bonuses and fees will be lower.

There are also no government-supported player protections or responsible gambling programs, which can result in financial distress and compulsive behaviours going unchecked.