There’s a sense of relief for those worried about Indian gaming, after a purported 28% tax on real money games that it was claimed would hit video gamesand esports has been clarified to only affect “real money” gaming such as casinos and horse racing.
According to India’s Economic Times (via GamesIndustry.biz), the 28% tax will not apply to video games as was feared. However, while it seems there was genuine concern that the tax would apply to the broader games industry - where government regulation has previously been called out by representatives of the industry - some claim this latest story was sensationalised by other actors such as in the real money gaming industry.
Founder of Outlier Games, Harish Chengaiah, commented, “Today's sensationalised statements from certain corners on 28% GST prove to be a great example of why the RMG/Fantasy Sports industry loves to create and maintain a homogenous image of ‘Online Games’ as they get to latch onto the video games industry and claim ‘Death blow to the Indian gaming industry’”
Co-founder of Hypernova Interactive, Mayur Bhimjiyani, went as far as to say, “There is a major misinformation campaign brewing to blur the lines between video games for entertainment and real money games. And this is being done using the simple fact that legacy legal terms such as ‘Online Gaming’ are used to define games where there is a chance to win money back via a wager. These are typically Real Money Games, Fantasy Games or Casino games.”
Confusion or collusion?
Harish Chengaiah, who also works an industry advocate and helped pen an open letter to the Indian government earlier this year, indicated he felt some elements of the RMG and casino industry were intentionally piggybacking on the controversy around the purported tax, saying, “My advocacy efforts are exclusively towards the "video games industry" which is not affected by the announced 28% GST taxation.” He also noted that, far from moving on uninterrupted, there has been significant movement within the Indian government to slowly work with and clarify where video games stand in their gaming legislation.
It’s good news overall for the Indian gaming industry, although the industry will continue to receive a fairly substantial 18% tax rate. But it presents a wider question of just how interlinked video games still are with RMG in the minds of the public, especially on mobile since there are some games which utilise RMG - such as slots - although these would likely fall under the umbrella of those "non-video game" games that are affected by the tax rate.
Judging by Chengaiah and Bhimjiyani however, although some elements of the industry panicked, for those in the know there’s a sense that progress is being made and that the distinction is much clearer for those in government itself.