As many as 45 game makers in India have written to the Prime Minister’s Office and the Ministries of Information & Broadcasting and Electronics & Information Technology, attempting to differentiate between so-called real money gaming and the online gaming industry.
Their concerns have arisen due to their concerns regarding how a new tax imposed by the Goods and Services Tax (GST) Council on real money gaming and how this could affect their business.
Real money gaming - games in which a player risks their own real money in the hopes for winning more of the same - have been hit by a 28% tax on player's deposits. The broad target of the tax is what it calls “online gaming” and, although the government has since clarified that the tax won’t affect mobile games, the term has caused some confusion as to which apps and practices fall under the remit of the tax and which do not.
Now, the country’s games industry is concerned that it could be affected in its entirety, potentially stiffling a burgeoning online and app industry, all due to the government’s poor choice of words.
Real business, real money
The game makers, which include the likes of Firebolt Entertainment and Outlier Games, are attempting to convince the government to clear up the confusion, stating that “‘‘Online Games’ is too broad [...] a term and carries a different meaning in Indian jurisprudence compared to the global understanding, leading to confusion among gamers, international investors, game publishers, and media during the GST row.”
“International game corporations, publishers and investors are under the impression that the Indian regulatory system does not differentiate between video games and RMG/Fantasy Sports (iGaming) and applies blanket regulations to both industries. This has resulted in hesitation to invest in Indian video game companies and discouraged potential investments, co-productions, and strategic partnerships.”
“The Indian game industry is more than Real Money Games, and believe it or not, they are here to stay,” said Lucid Labs CEO and founder Chirag Chopra. “No matter what they try to tell you on social media, your beloved games will not be taxed 28 percent; that privilege is reserved for Real Money Games.”
For its part, the real money games industry has complained that the fee could significantly harm their business, as players may be discouraged from playing if they were forced to pay an additional 28% on their deposits.
Earlier this week, Sensor Tower data showed that India led the way in terms of downloads for the month of June.
