India’s GST Council Defers Tax Decision on iGaming and Casino Services
India’s Good and Services Tax (GST) Council has decided to postpone imposing a 28% tax on casinos and iGaming. The decision to bring these verticals under the GST was deferred due to the issues raised by Goa, Union Finance Minister Nirmala Sitharaman announced. The announcements were made at the 47th GST Council Meeting in Chandigarh on 29 June 2022.
Goa Requests Special Treatment for Casinos
In her statement, FM Sitharaman said that the Group of Ministers (GoM) looking at iGaming and online betting would consider all aspects of the issues raised before delivering a final verdict on 15 July. The GoM is led by Meghalaya CM Conrad Sangma.
The Union minister further elaborated that Goa’s finance minister had requested that casinos should be provided special treatment while discussing the casino aspect of the report. The GST Council decided that the GoM would also hear what casinos and online gaming stakeholders have to say about the matter.
Sitharaman also said that the GST Council would assemble once more to discuss the revised report in Madurai in the first week of August. Goa’s finance minister had requested the council to consider giving special treatment to casinos as they required greater detail. The minister shared his insights on the issue in front of the council.
The minister’s concerns were about the exact points of taxation whenever a customer would visit a casino. Issues about the services that will attract taxes will be discussed and examined again by the panel before it concludes. The group would also listen to the stakeholders hailing from these industries.
iGaming and Casinos Classified as Gambling
While referring to Goa’s concerns, Sitharaman said that the GoM considers casinos and iGaming as a part of the larger gamut of gambling activities. While skill might have a part to play in these verticals, the two exercises are equated with gambling, besides horse racing. As iGaming and wagering at casinos were judged similarly, they were uniformly taxed under the existing laws. Currently, casino services and iGaming are taxed at 18% GST.
Despite the panel agreeing to reexamine the taxation proposal that would bring casinos, betting, and iGaming under the ambit of the GST, the committee has been adamant about maintaining the current status quo.
The panel wanted to continue the status quo as its observations are based on the verdict delivered by two Supreme Court judges who upheld the decision to treat online gaming and casino services uniformly.
India’s Gaming Industry to Grow Because of Gen-Z
While the government is trying to accommodate the voices of numerous industry stakeholders before arriving at a concrete decision about taxing casino services, betting, lottery, and online gaming, the iGaming and casino industry in India continues to grow rapidly. One of the reasons why the iGaming and betting industry is booming in India is because the younger generation has embraced online casino games and sports betting with open arms.
The popularity of iGaming and online betting amongst Indian youth is the key driver of the sector’s growth. A recent study found that users aged between 18 to 34 will present an insatiable demand for more iGaming and online betting content.
Having realized the enormous potential for developing the iGaming industry in India, several providers are employing strong advertising and promotional strategies to popularize these services even more amongst young players.
Streamers, eSports Offerings to Promote iGaming Services
One of the most popular promotion methods employed by iGaming and online casino providers in India is to ally with popular gaming streamers who command immense loyalty and respect among the youth. Another option is to increase the eSports market offerings, which some online casinos in India are already doing.
The various attempts of brands and operators to consolidate their hold over the casino and iGaming industries are to counter the immense competition. The Indian market is not untouched by these strategies. Providers and operators are aggressively jostling for a space in the international market to assert a globally influential presence.
The emergence of the Metaverse as the go-to streaming platform for gamers has been challenging popular streaming platforms such as YouTube and Twitch. Facebook Gaming by Metaverse has already made inroads in the game streaming industry and registered dramatic growth.
Besides these expansion strategies, providers are also trying to propagate safer gambling practices to win the trust of Gen-Z. Time-out functions, betting limits, and deposit limits would encourage young Indian players to adopt a responsible approach to gambling, which will also be productive for online casinos and iGaming providers
