Gaming
Unlocking the impact of the 28-cent GST levy on online gaming, horse racing, and casino activities
Mumbai: In recent developments, the GST Council, a body responsible for making crucial decisions regarding India’s Goods and Services Tax regime has made a significant announcement, reshaping the landscape of taxation in India. The council’s decision to impose a 28 per cent Goods and Services Tax (GST) levy on the entire value of online gaming, horse racing, and casino activities has sent ripples through various industries. This move has far-reaching implications, not only for businesses involved in these activities but also for the broader economy. In this article, we delve into the intricacies of this tax revision, exploring its implications and potential consequences for the gaming and entertainment sectors.
Before the implementation of GST, the taxation and regulatory landscape for online gaming, horse racing, and casino activities in India was marked by a lack of uniformity and consistency. Different states had different rules and tax rates, creating challenges for businesses operating in these sectors. The introduction of GST aimed to bring about a more standardized and streamlined taxation system for these industries across the country.
Potential Implications for Consumers
As these industries adjust to the new GST levy, consumers may also feel the impact. The 28 per cent tax rate could lead to higher costs for online gaming, horse racing bets, and casino visits. This may prompt some consumers to reconsider their entertainment choices or allocate their budgets differently. While it may pose challenges for businesses and consumers, it’s essential to adapt and navigate these changes effectively.
Here are some views on the topic by industry experts…
Edited excerpts
Skyesports founder and CEOShiva Nandy:
“The 28 per cent GST on online gaming only applies to real-money gaming in which players pay money to participate. As India’s leading esports tournament organizer with a goal of elevating esports from the grassroots, all our competitions are open with no entry fee. Thus, the new GST laws don’t apply to us and make no difference in our operations.”
Revenant Esports founder and CEO Rohit Jagasia:
“Only a year ago with the bans on Free Fire and BGMI, the Indian esports scenario was struggling with a dearth of options for mobile gamers. I applaud Garena in their efforts to bring Free Fire India and already make a commitment towards esports which will be a big boost to welcoming old and new players alike. While we don’t currently have an esports roster in the game, we are always on the lookout for potential titles to enter and Free Fire is certainly one on our radar.”
Esports Federation of India (ESFI) president & acting director general of the Olympic Council of Asia Vinod Tiwari
“It is imperative first to understand that the 28 per cent GST is going to be applicable to the iGaming sector, including Real Money Gaming (RMG), fantasy sports, teen patti, rummy, and poker which are categorised under gambling or betting in the rest of the world. Contrary to some media reports, this GST is neither applicable nor will it have any impact on the ‘Video Games’ or the Esports industry.”
“Esports has been officially recognised as a sport by the government which finally and thankfully distinguishes it from any and all activities like iGaming such as fantasy, teen patti, rummy, poker, betting, and gambling, among others. It will carry on to be taxed the way it always has been. Theories of ‘game of skill’ and ‘game of chance’ which only exist in our country neither apply nor are relevant in the Esports ecosystem,” said Tiwari.
E-Gaming Federation secretary Malay Kumar Shukla:
“This is an extremely unfortunate decision as charging a 28 per cent tax on full face value will lead to a nearly 1000 per cent increase in taxation and prove catastrophic for the industry. A tax burden where taxes exceed revenues will not only make the online gaming industry unviable but also boost black-market operators at the expense of legitimate tax-paying players, further undermining the industry’s image and capacity to survive. It is in addition to the loss of employment opportunities and the huge impact on marquee investors who are heavily invested in this sunrise sector. Furthermore, online gaming is different from gambling, and the Supreme Court and various High Court decisions have reaffirmed the status of online skill-based games as legitimate business activity protected as a fundamental right under the Indian constitution. While the industry was quite optimistic with the new developments including amendments to the IT rules and implementation of TDS on net winnings, all this will be moot if the industry is not supported by a progressive GST regime. We will wait for further details to assess the situation and evaluate our approach.”
PlayerzPot co-founder & director Mitesh Gangar:
“The GST council’s decision to levy 28 per cent GST on total face value on online gaming will corner the gaming industry in a big way. The overall operations will not be feasible. The high tax burden will completely restrict the cash flow, limiting a company’s ability to invest in research, innovation, expansion or survival. The higher burden will also put a blocker on India’s massive gaming industry and deter new players from entering the industry. The rising gaming economy will take a big hit and trigger economic stress, restrict job creation and curtail economic growth within the sector.”
Qlan co-founder and CEO Sagar Nair:
“The decision of the GST council to impose a 28 per cent tax will have a significant impact on the online gaming industry, which unfortunately includes the Esports community. While we understand that the government needs to impose such measures on casinos, horse racing, and gambling, the higher tax rate is not justified for the competitive gaming community. It can discourage new players from entering the market as their hard-earned earnings generated through their efforts just like mainstream athletes will be taxed on the same level as those involved in gambling and other such practices. For the Esports industry to continue its unprecedented growth and recognition on the international stage, it is vital for the government to treat Esports as a separate category with reasonable tax rates that would support the development of the sector.”
Alpha Zegus founder & director Rohit Agarwal:
“Yet again, esports being included in the same domain as online gaming, horse racing, and casino, has put our industry at a major disadvantage. While the government might have fair reasons to impose higher GST on horse racing and casino winnings, imposing the same rules on an industry like esports doesn’t seem fair. Esports does not only have a ‘win or lose’ situation based on luck but also has a very big element of skill that determines the outcome of the game. This is not what I expected, and our fight to separate esports from other labels still continues.”
IndiaPlays COO Aaditya Shah:
“The GST council’s recent stance is both surprising and disappointing. Despite the government’s previous positive steps and clarifications regarding the skill-based gaming industry, such as clarification about TDS on winnings and establishing self-regulatory bodies, this new decision contradicts and undermines those efforts. As of 2022, the revenue generated by the Indian online gaming industry has already surpassed $2.8 billion, and it is projected to reach $5 billion by 2025, indicating an annual growth rate of 28-30 per cent. The number of gamers in India currently stands at 420 million, and this figure is expected to experience exponential growth by 2025. Additionally, there are approximately over 1,300 gaming startups in India, highlighting the industry’s potential for unlocking further growth. However, imposing a 28 per cent GST on anything other than our gross revenue will have adverse consequences. It would be highly unjust to burden the industry with such a significant tax. Not only would this decision impede the industry’s progress, but it would also put millions of jobs at risk.”
AIGF Spokesperson said,
“A vast majority of online gaming companies fall within the MSME sector. With over 400 per cent increase in GST liability under the new tax regime, many entrepreneurs who had innovated in the sector would be disproportionately impacted with companies paying more in taxes than they would be generating in revenue. Since the decision, some companies have announced their closure or wide spread layoffs and we believe this trend will only increase in the coming months. While the decision might have been undertaken with a view to increase revenues to the exchequer, its impact might in fact see a fall in revenues as well as company valuations.”
Gaming
MTG gaming chief Benninghoff joins NODWIN board as esports firm primes for IPO
The Gurugram-based esports firm is pursuing a public listing, has returned to profitability and is growing revenues by 42 per cent
GURUGRAM: NODWIN Gaming is moving fast. The Gurugram-based gaming and esports company has launched a pre-IPO fundraising round, appointed UBS as lead adviser for both the round and a subsequent public listing, and landed a heavyweight board director, all in one go.
The new board member is Arnd Benninghoff, executive vice president of gaming at Stockholm-listed Modern Times Group (MTG), who has overseen the group’s strategic investments and portfolio growth since 2014. He is no stranger to building things: Benninghoff has founded and built fifteen companies, served as chief digital officer at ProSiebenSat.1 Media AG, managing director of SevenVentures, and chief executive of Holtzbrinck eLAB. He began his career as a journalist at Deutsche Presse Agentur and various TV networks, holds a Diplom-Kaufmann in business and administration from the University of Münster, and previously sat on the board of Edgeware AB.
The numbers back the ambition
NODWIN is not pitching a story without substance. The company has returned to EBITDA profitability and posted a 42 per cent year-on-year revenue surge, reaching $58.5m in the first nine months of FY2026. The pre-IPO round will combine a primary issuance to fund global expansion through organic growth and acquisitions, alongside a secondary sale to give existing shareholders some liquidity.
Akshat Rathee, co-founder and managing director of NODWIN Gaming, said Benninghoff understands “the entire lifecycle of the gaming and media ecosystem, from the boots-on-the-ground reality of building startups to the strategic complexity of managing multi-billion dollar global portfolios.”
Benninghoff, for his part, said the company “sits at the intersection of sports, entertainment, and technology, making it one of the most exciting players in the global gaming landscape today.”
A portfolio built for the global south
Founded in 2014 by Rathee and Gautam Virk, NODWIN has quietly assembled one of the more compelling esports portfolios outside the Western hemisphere. Its properties include DreamHack India and Comic Con India, and it recently acquired StarLadder, the Ukraine-based tournament organiser behind premier events in CS:GO and Dota 2. The company also serves as a long-term strategic marketing partner for the Evolution Championship Series (EVO), the world’s most prominent fighting game tournament, helping push it into new geographies.
Its geographic focus spans South Asia, Central Asia, Southeast Asia, the Middle East and Africa. Backers include Nazara Technologies, KRAFTON, Sony Group Corporation, JetSynthesys, and the founders’ investment vehicle Good Game Investments.
What comes next
With UBS running the books, a board freshly reinforced with European media and gaming expertise, and revenue heading in the right direction, NODWIN is laying the groundwork deliberately. The esports industry has burned investors before with big promises and thin margins. NODWIN’s return to profitability, combined with a real portfolio of owned intellectual properties across gaming, music and youth culture, gives it a more credible runway than most. The IPO clock is now ticking.
