Gaming firms offer to pick up tax bill to keep players hooked

economictimes.indiatimes.com:

online gaming companies including Dream11, Mobile Premier League and Games24X7 are running personalised offers and schemes, in an effort to keep regular gamers and influencers hooked on the platforms amid an increase in tax liability.

The goods and services tax rate on real money gaming has been increased to 28% effective October 1. The tax is applicable on the full face value, or the money that a user deposits to participate in a game.

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Industry insiders said platform providers are subsidising the new tax liability on users through deposit offers and bonuses, by taking a hit on their own books.

“We have not seen any major contraction and depletion in active gamer base…our loyal big-ticket customers are still playing online,” said Anil Malani, chief financial officer of Delta Corp that runs the Deltin Royal casinos and poker platform Adda52.com.

Adda52’s online revenue has slightly gone down from Rs16-17 crore to Rs13-14 crore month-on-month, he told ET. “That’s because the average ticket size and frequency of playing has gone down a bit. We are not encouraging our players to deposit large sums in one go because now you have to pay a hefty tax on deposits even before playing. This directly takes a hit on our bottom line also.”


On an industry level, Malani expects the online RMG sector to go through consolidation as smaller players run out of cash by compensating for the high taxation and with no new funding around the corner.

“We believe all the online companies now are actually