Grim outlook for real-money gaming

livemint.com:

₹1.12 trillion tax payments retrospectively. However, as the notices await adjudication, the final figure has not yet been determined under the provisions of Central GST Act. Delhi-based lawyer Dhruv Garg, who is a technology law and policy expert, said 2023 and 2024 have been a mixed bag for the industry.

The biggest challenge at present is all the pending show-cause notices against multiple skill gaming companies, he added. The Directorate General of GST Intelligence had issued a show-cause notice to Gameskraft Technologies Pvt. Ltd, that operates RummyCulture and others in September 2022, with GST demands of ₹21,000 crore, with penalties and interest.

After this, other companies, including Sporta Techologies Pvt. Ltd, Dream11 parent and PlayGames24x7, My11Circle’s parent, also received hefty show-cause notices. “At this point, some companies are moving high courts as well as the Supreme Court and some even managing a stay or interim relief.

The industry is expected to gain clarity on the final legal stance once the apex court makes a decision on the Karnataka GST judgment in the Gameskraft case," he said. Driven by fantasy games, poker, and others, the online gaming market grew at a 28% compound annual growth rate over FY20-23 to ₹16,428 crore, but is expected to slow down to 15% CAGR till FY28, a recent EY report said. The real money gaming sub-segment held an 83% share in FY23, but despite its dominance, the segment’s revenue share may fall sharply to 75.4% by FY28, due to the legal amendments.