-
Casinos for you
India's iGaming Sector Stands Against Proposed Tax Increases
By Shane Addinall Jan 13, 2024 IndustryIndia’s new tax laws have iGaming operators fighting for change, but will it be enough to shift the outcome? PM Modi’s Goods and Service Tax hike has many companies leaving the region while others are doubling down their lobbying efforts.Ever since India’s Prime Minister, Narendra Modi, made the announcement in July of 2023 that a higher tax rate would be imposed on gambling companies, operators have been fighting for change. Now that the Goods and Service Tax (GST) is in full effect, the iGaming industry is still lobbying and challenging the laws in place.
Industry bodies such as the E-Gaming Federation and providers like Delta Corp have been fighting the new tax laws, including taking legal action against India’s GST Council.
Thanks to these efforts, the Supreme Court has agreed to a final hearing of cases challenging the regulations and the GST’s decision. The hearing will take place on the 2nd of April 2024.
India’s New Tax Laws
In October 2023, India’s new tax laws were brought into force. This new law pushed the Goods and Service Tax levy for the gambling sector from 18% to 28%.
More than just a higher tax rate, this new law also allows the government to claim back tax from operators. These claims date back as far back as 2017, which could bring in more than INR1 trillion (or more than $12 billion) to the government’s coffers.
While the government insists that this is a fair tax and makes up only a fraction of the overall gambling revenue, stats show that India’s gambling industry was only worth about $1.5 billion in 2023. This means that for many companies, it’s cheaper to leave the country entirely rather than attempt to catch up and continue to pay the increased taxes.
Big Changes and Exiting Gambling Groups
With the changes to India’s tax laws in full effect, not all operators and gambling groups are willing to put up with the mayhem it brings. In October 2023, Super Group decided to pull the plug and leave India as soon as the new laws came into full effect. Super Group is the parent company of large operators like Betway and Spin.
Super Group felt that the new tax laws were impactful enough that they no longer made India viable as a gambling region. It immediately dropped all services. The group’s CEO, Neal Menashe, shared the following:
Quote“We are continuously evaluating evolving regulatory landscapes across the many markets we serve. Informed by years of operating our geographically diverse business, we remain confident about the long-term growth opportunities in front of us.”
Other companies, like Mobile Premier League, chose to stay in the country but were forced to lay off employees to afford the extra tax rate.
After India’s government made big changes to the gambling laws and how it is regulated in January of 2023, many believed that the future was bright. However, the 10% tax increase was enough to have many operators questioning whether or not it’s worth the loss in revenue.
You might also like