{"id":248,"date":"2022-05-27T17:54:44","date_gmt":"2022-05-27T12:24:44","guid":{"rendered":"https:\/\/dev.casinowings.com\/india\/2022\/05\/27\/new-indian-law-likely-to-impose-28-tax-on-online-gambling-operators\/"},"modified":"2026-09-07T05:45:11","modified_gmt":"2026-09-07T05:45:11","slug":"new-indian-law-likely-to-impose-28-tax-on-online-gambling-operators","status":"publish","type":"post","link":"https:\/\/www.casinowings.com\/india\/new-indian-law-likely-to-impose-28-tax-on-online-gambling-operators\/","title":{"rendered":"New Indian Law Likely to Impose 28% Tax on Online Gambling Operators"},"content":{"rendered":"

The Indian government is deliberating on a legislative proposal that is likely to impose a 28% tax on online gambling operators<\/a> in the country. A Group of Ministers (GoM) has proposed the change to bring levies from online gambling at par with casinos, land-based gambling, and horse racing. Although it is unclear when it will be applied, the new tax rate will be a part of the Goods and Services Tax (GST) regime.<\/p>

New Rate to be Applicable on Chips Purchase<\/h2>

The change is motivated by legislators\u2019 opinion that online gambling operators should pay more as the operational costs of physical gambling are higher than web-based operations. Currently, most online gaming platforms pay 18% tax, while horse racing, betting, and land-based gambling attract 28% tax, collected on the face value of the bets. iGaming operators are yet to share their thoughts on the proposed 28 percent tax deduction proposal since iGaming is still banned in most states across India.<\/p>

The GoM, led by Meghalaya\u2019s Chief Minister, Conrad Sangma, is yet to submit its report to the finance ministry. Several industry experts have opposed the proposal citing that treating online operations at par with physical gambling will obstruct the development of online gambling in India. The ministry has invited gambling industry stakeholders and experts to provide their input on a better tax structure.<\/p>

However, online industry experts aren\u2019t the only ones opposing the proposal. Verticals like horse racing have raised concerns about the tax burden and the drastic effects of over-regulation that might force operators to turn to illegal gambling marketplaces.<\/p>

There have been various suggestions to ease the tax conundrum, such as taxing only the commission gathered by the race clubs instead of bets. However, the measures have not been enacted yet, with Goa and Sikkim still collecting taxes on the face value of bets.<\/p>

The current tax rate for the land-based gambling segment has been in place since 2017. The industry\u2019s average revenue plummeted to $93,000 from $230,000 in 2022. <\/b><\/span><\/p>

States Support eSports and iGaming Startups<\/h2>

India\u2019s budding eSports and iGaming scene has attracted the support of several state governments such as Manipur, UP, Goa, and Uttarakhand. Despite the recent row with the Karnataka High Court over online gambling operations, states are keen to support various eSports and iGaming startups.<\/p>

The Karnataka High Court recently lifted a ban on fantasy sports, defending it as a legitimate activity conducted under Article 19 (1)g of the Indian Constitution. Many state high courts such as Punjab & Haryana, Rajasthan, and Bombay have previously ruled favour of gambling operations on similar lines. However, some states still consider gambling as a game of chance rather than seeing it as a skill-based game.<\/p>

While there have been protracted disputes regarding the nature of gambling in India, the renewed focus on the iGaming industry with the support of states is expected to yield various benefits for the economy. Currently, the Indian iGaming market boasts 200 million players spread across 200 online platforms, making it one of the most lucrative segments.<\/p>

The Indian gaming market might touch a $7 billion high by 2025, increasing from its current valuation of $1.8 billion, according to a report by the Internet and Mobile Association of India (IAMAI). The report stated that over 40% of Indian gamers spend about $2.95 on iGaming every month.<\/p>

Industry experts say that the expansion of iGaming in India will create more jobs while bringing in more revenue and providing an impetus to innovation. Indian states, particularly the ones that had elections, are therefore focusing on developing this vertical by elevating the iGaming scene and attracting more players.<\/p>

Indian iGaming firms such as the Mobile Premier League (MPL) have already set sights on expanding their global footprint after acquiring GameDuell, a studio based in Berlin. MPL CEO Sai Srinivas dwelled on the capability of Indian firms to cater to international audiences and the growing iGaming segment. Such exposure will help Indian gaming companies associate with experienced developers in the field and evolve into competitors deserving recognition and revenue.<\/p>

The growing virtual gaming circuit needs robust digital infrastructure and policy frameworks that will help it attract revenue, says IPK Mishra of the All India Gaming Federation. The body\u2019s CEO Ronald Landers said that the proposed Animation, Visual effects, Gaming, and Comics (AVGC) task force would develop a policy framework to nurture innovation and support the growth of metaverse and e-gaming verticals.<\/p>\n

\"Avatar<\/figure>
Daniel Tafvelin<\/a><\/h5>

Daniel is the content manager at CasinoWings. With 10 years of involvement in customer service, he is keen on guiding you to the best possible casino experience. Read more about Daniel<\/a><\/p>\n

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The Indian government is deliberating on a legislative proposal that is likely to impose a 28% tax on online gambling operators in the country. A Group of Ministers (GoM) has proposed the change to bring levies from online gambling at par with casinos, land-based gambling, and horse racing. 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