Expected Impact of the Increased Gambling Tax in India – Future Concerns

We will go through GST’s controversial levy and the expected impact of the increased gambling tax in India. We will also provide detailed information regarding public response and what representatives of the Indian gambling industry think of the situation. Feel free to use the links below that will take you to a relevant section of the blog.

India’s Controversial Levy and Effects from Tax Increase

The controversial levy, GST – The Goods and Services Tax Council^[1] has the tax increase already in power and plans an estimated revenue of 140 billion rupees that is to be collected from online gambling operations as the next financial year goes by.

This has impacted heavily the Indian online casinos without any doubts. Public concerns are voiced, and gamblers in the country have already been affected.

This decision has provoked discussions and debates among industry officials, including shareholders and economists. In short, the industry representatives fear that the move has “hammered their earnings and impacted many gamblers“, all because of the already increased tax.

Important Details Regarding the Decision

The tax has increased, and this move stems from the fact that the Indian government wants to even out other industries and boost the revenue generated by the online gambling space – iGaming, casinos, and sports betting.

It is clear that the increased gambling tax has severely impacted not only the shareholders, but individual gamblers themselves, mostly in a negative way. Several factors are to be considered:

• Increased costs on all operations of the gambling industry in India
• Gamblers prone to negative changes
• Overall service price increases
• Negative effect on the smaller gaming businesses

It is clear that the 28% levy on funds collected by gambling operators will be imposed on every bet the user places. This has struck a major blow to the betting industry and investors, the government says, all caused by its move back in October 2023.

By implementing this, officials believe the process will have a significant financial effect in the Indian gambling industry. Gambling operators will be forced to act due to this whole situation. The tax was increased back in October, and GST estimates a revenue of 140 billion rupees that is to be collected over the next financial year, all coming from gambling operations.

Indian Representatives’ Responses

Secretary Sanjay Malhotra revealed that GST collections overall averaged 1.7 trillion rupees each month, and it is expected that it will be increased to 1.8 trillion going into the next financial year. A staggering change that will surely have economic backlash.

Malhotra proposed a return on tax in the 2025 fiscal year. He indicated that the government is estimated to receive around 75 billion rupees for the current financial year up to the end of March, reflecting a significant increase from 16 billion from the previous year. Chief operating officer Aaditya Shah stated that “the tax rate implementation of 28% has brought significant challenges to the gaming industry“.

He claims that the higher the tax rate implementation, the higher the impact on companies’ cash flows. Since the tax has already been implemented, negative impacts are already seen.

Future Prospects and Economical Impact

Looking objectively at the situation, we can provide an estimate of the turn of events that these changes will lead to going forward. We noted that the government expects to receive 75 billion going into next year, which is a significant increase.

But how does this impact the industry, the shareholders, the players, and all related entities? Indian officials have stated that the addition of the 28% tax has hammered their earnings and warns of an impact on gamblers”. GST’s decision has affected the whole Indian online gambling industry.

According to India’s Minister, the 35 billion rupees in tax that was generated from October to December last year means that the industry has stabilized, but not for long. He believes that the framework that has been conducted in April of 2024 will not change taxes.

Public view is another topic of concern. This increased tax has led to disturbances among regular gamblers because of higher costs and lower returns. This may lead to addiction, which is another concern. Unfortunately, all of this points to a drastic, negative impact on the Indian gambling industry^[2].

We are currently unsure if responsible gambling organizations such as GambleAware^[3] or GAMSTOP will have any changes on their end or any regarding the current situation. It goes without saying that they have a huge role in the gambling industry.

Wrapping Up – Our Final Thoughts

It is time to conclude our article and present you with our concluding thoughts and remarks. The staggering tax increase has had a significant impact on India’s gambling industry, and its effects are already felt, but only time will tell how they will further develop.

Shareholders, gamblers, officials, and all related entities have voiced their concerns about it, and our current prospect on how this develops seems more negative than positive.

We are curious as to how the events will unfold, and we can say with certainty that the current facts we have give a promising estimate of the situation. We can only hope the gambling industry pulls through and players can partake and have fun in this ever-growing industry.

References and Useful Links

The section below will provide some of the research materials we have used to compile this article and make it as accurate as possible. Feel free to click on the links that will take you to the relevant resources.