Posted on: October 3, 2023, 06:49h.
Last updated on: October 3, 2023, 06:49h.
India’s iGaming operators are facing a major setback as the government imposes a record-breaking 28% Goods and Service Tax (GST). The consequences have already begun, with Super Group, a prominent global sports betting operator, announcing their immediate exit from the Indian market.
Super Group, the parent company of popular brands such as Betway, Spin, and Hyperino, had a strong presence in India’s online gambling market. However, the sudden tax hike has forced them to reconsider their operations in the country.
The Indian government’s decision to impose a 28% tax on iGaming revenue represents a significant increase from the previous rate of 18%. This unexpected change has sent shockwaves through the industry, with Super Group paving the way for other operators to potentially follow suit.
Betway, a leading brand under Super Group, had already faced obstacles in India as its online gaming app was banned earlier this year. With Super Group’s exit, experts anticipate a domino effect among iGaming operators struggling with the increased tax burden.
Super Group’s withdrawal from India is just the beginning, as industry analysts predict a detrimental impact on the profitability and sustainability of iGaming operators in the country. The higher tax rate not only affects their financial viability but also raises concerns about the growth potential of the Indian market.
The sudden tax hike is likely to discourage foreign investment in India’s iGaming sector, ultimately hindering its growth. Furthermore, it could deter new players from entering the market, reducing competition and innovation.
The government claims that the increased GST aims to regulate the gambling industry, but history has shown that excessive taxation often leads to an increase in illegal gaming activities, as seen in the Philippine Offshore Gaming Operator segment.
Impact on Economy
Super Group’s departure will not only affect its employees but also have repercussions on local businesses and affiliates associated with the brand. The company has been actively involved in sponsorships and partnerships within the Indian sports and entertainment industry, particularly in eSports, contributing to the overall economy.
As news spreads about Super Group’s exit, industry stakeholders are closely monitoring the government’s response and reassessing their strategies. The Federation of Indian Chambers of Commerce and Industry (FICCI) has already requested urgent discussions with the government to reconsider the taxation policy.
The All India Gaming Federation has also criticized the move, considering the GST tax rate to be “unconstitutional” and warning of potential devastation to India’s gaming industry.
The future of the iGaming industry in India hangs in the balance as operators evaluate their ability to navigate the new tax landscape. The government’s decision to increase the tax rate has created a critical juncture for online gambling in the country.