The online gaming industry was dealt a heavy blow yesterday after the GST Council announced 28% tax rate on full face value amount. Entrepreneur Ashneer Grover of Shark Tank fame, who recently stepped into the fantasy sports space with his venture CrickPe, shared his frustration on the development.
Much like others, Grover, through his Tweet, hinted that it is the end of the online gaming industry.
RIP – Real money gaming industry in India. If the govt is thinking people will put in ₹100 to play on ₹72 pot entry (28% Gross GST); and if they win ₹54 (after platform fees)- they will pay 30% TDS on that – for which they will get free swimming pool in their living room come…
— Ashneer Grover (@Ashneer_Grover) July 11, 2023
A popular Twitter personality, Gabbar also commented on the matter, saying that the key issue is of inconsistency in policy-making which can potentially destroy businesses and scare away foreign investors.
The issue is not whether real money gaming should be taxed as it’s a form of gambling, but the issue is of policy inconsistency. First allow them to proliferate, create jobs & capital, then one fine day pull the plug. It took them
10 years to realise it’s not a game of skill?…
— Gabbar (@GabbbarSingh) July 12, 2023
Adding to Gabbar’s Tweet, Grover said that all the foreign investors in the country will take into account regulatory risks, leading to drying up of funds across the board. He further asked why the government and the public were not angry when cricketers promoted online games.
You got billions in from foreign investors as FDI. Celebrated FDI inflow ! Now the same investors will apply regulatory risk discount to India and funds will dry up. Not only for online games – but across sectors. Across startups.
Also why judgement on online gaming… https://t.co/00E1yqOkoC
— Ashneer Grover (@Ashneer_Grover) July 12, 2023
The decision comes at a crucial juncture when the real money gaming industry was expecting a huge boost. A recently released report by Redseer revealed that the fantasy gaming sector witnessed 24% revenue growth during IPL 2023 as compared to the previous edition.
Talking of CrickPe, Grover’s Third Unicorn launched the fantasy gaming app in March this year, right before the commencement of IPL 2023. The app differentiates itself from other existing ones by incentivizing the player who performs well. Grover also appeared in advertisements for the platform.