A Striking 28% on Gaming Deposits to Take Effect on October 1 in India

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Even though a 28% tax on bought chips and deposits made at casinos raised a lot of discussions and controversy in India, the government plans to start implementing it on October 1. Let’s look closer at how that tax will be imposed and what are potential outcomes for the Indian gambling market.

The Council met on Wednesday, August 2nd to provide the concerned gambling industry with the new tax rules clarifications. This was the meeting that all those related to gambling in India awaited, as the initial announcement on July 11th was confusing and controversial.

The GST council confirmed that 28% will be imposed on initial deposits at online casinos and bought chips at brick-and-mortar casinos. Thus, it will not be counted from all placed bets, so all winnings will not be affected by this new tax. The calls by the casino states of Goa and Sikkim to apply this new tax to the gross gaming revenues were rejected.

It was also decided to review the success of a newly implemented tax after six months to see if it is effective enough. The E-Gaming Federation and the Federation of Indian Fantasy Sports released a joint statement and welcomed the clarification. However, they continued to express concerns about how the 28% tax might influence the gambling industry in India. Yet, they believe that this new taxation rule might lead to innovation, as companies will have to rebuild the foundation of gambling in India.

DELTA CORP POSTPONES IPO

New taxation rules are not alive yet, but we can already see their effect on the industry. Delta Corp, one of the largest gaming companies in India, has decided to place their IPO on hold because of uncertainty of the future of gambling in the country. 

Delta Corp awaits clarification from the government on how this tax on revenue will work. After that, the company will consider when the best time is to make an IPO happen. The company’s CFO, Hardik Dhebar, that investing companies would like to have clarity on the future potential of the gaming industry in India, and that “nobody is going to put $1 into any new investment, especially in a sector which has this kind of overhang”.

At the same time, governments in several other countries continue to introduce new gambling rules to ensure responsible gambling. Certain restrictions have recently been announced in Victoria, Australia. Moreover, the decree on responsible gambling was approved in Spain.