In a bid to differentiate themselves from the real-money gaming sector, which has been subject to a 28% Goods and Services Tax (GST), the video gaming industry in India has taken steps to emphasize their separate identity. On July 26, 2023, a collective effort involving 45 video game companies resulted in letters being addressed to the Prime Minister’s Office, as well as the Ministries of Information & Broadcasting and Electronics & Information Technology. The goal was to clarify the distinction between the two sectors, particularly due to the prevalent confusion caused by both being referred to as ‘online gaming’.
The real-money gaming industry encompasses platforms offering fantasy sports, poker, rummy, and similar applications where users can engage in competitive activities by depositing money. The industry has been grappling with the imposition of a 28% GST on all deposits, a move that has been met with criticism from stakeholders. Of note, the government and the real-money gaming industry have both employed the term ‘online gaming’ to describe their activities.
In light of this ambiguity, the video gaming sector seeks to disassociate itself from the real-money gaming domain and avoid being lumped together under the broader ‘online gaming’ umbrella. The communication to government authorities emphasizes the necessity of distinguishing between the two segments, each with its unique characteristics and implications.
The appeal for clarity from the Prime Minister’s Office and relevant Ministries highlights the video gaming industry’s commitment to maintaining transparency, fostering a favorable ecosystem, and ensuring the continued growth of this entertainment medium. This step not only aims to eliminate confusion but also seeks to create an environment that nurtures innovation and responsible gaming practices.
By addressing the concerns and seeking a clear differentiation, the video gaming industry is taking a proactive stance in shaping its identity and contributing positively to the digital landscape of the country. As discussions evolve, a more accurate representation of these distinct sectors is anticipated, providing a more conducive environment for both the video gaming and real-money gaming industries to flourish.