Online real money-based gaming platform Fantok has halted its operations across India. This comes after the government’s decision to keep the GST rate of 28% on full face value. The company now joins the roster with others in the same boat.
“The evolving landscape of regulatory measures in the real money gaming sector in India, as announced earlier this year, has presented complex legal hurdles that have forced us to reevaluate our direction,” the company said in its notice.
The company further explained that its legal advisors have called the situation of 28% GST paired with other compliant payments as uncertain. Thus, Fantok has arrived at a decision of temporarily suspending its operations in the country.
“In light of these circumstances, we have made the difficult decision to temporarily suspend operations at Fantok,” the company wrote.
The Gurugram-based gaming startup was fairly new in the market. Ronak Ahuja, Prakhar Saxena, and Ashok Vishwakarma laid the foundation of Fantok in 2022. Since then, the startup onboarded over 100 creators on its platform with over 15,000 downloads on its app.
This pause will help navigate the challenges thoughtfully, says Fantok cofounder Ronak Ahuja
“Our decision to temporarily suspend operations underscores our commitment to operating within a legal and compliant framework while exploring new avenues for growth. This pause will enable us to navigate these challenges thoughtfully and consider strategic pivots that align with the evolving landscape,” Ahuja said, as per Entrackr.
This is not the first RMG platform to take this harsh step. Prior to Fantok, Quizy also ceased its operations due to the increased GST burden. MPL, Spartan Poker and Hike’s Rush also laid off a large chunk of its respective workforces owing to GST hike.
However, the current decision to levy 28% GST on full face value will be evaluated after six months of implementation. The evaluation is likely to bring some changes and thus, the RMG firms might see a revival.