The recent decision of the Indian government to increase the tax on iGaming immediately led to negative consequences. Thus, several companies including such a major brand as Super Group announced that they are leaving the Indian market. Add to this news the events that took place at the beginning of 2023 when several iGaming apps were banned, and you might think that the market has not taken the best direction. Read on to find out why the Indian gambling and betting scene has been one of the most promising for a long time and why a major brand is leaving.
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The Rise and Fall of the Indian iGaming Market
With a host of iGaming companies entering the Indian market, the local iGaming scene in recent years has evolved into a thriving hub for global operators. Major players such as Super Group, the parent company of popular brands such as Betway, Spin and Hyperino, have been actively involved, contributing to the growth of the industry.
Year after year, we have seen new platforms and gaming products from cutting-edge vendors and providers enter the market. However, things changed dramatically when the Indian government decided to impose a staggering 28% Goods and Services Tax (GST) on iGaming revenues, a significant jump from the previous 18%.
Reasons Why India Was So Appealing to iGaming Giants
The Indian iGaming sector has long been a tidbit for numerous iGaming companies, including game providers, casino operators and sportsbooks. The huge potential of the market and the enthusiastic response from Indian players have made it attractive to global operators. Here are a few reasons why the Indian online gambling and betting market has flourished in recent years:
- Young generation. The average age of Indians is 28 years and they are people open to new and exciting technology and entertainment including iGaming platforms.
- Passion for sports. Indians love to watch sports matches, with cricket being the number one choice for the country. Many Indians prefer to both enjoy watching IPL matches and sports betting.
- Cultural acceptance. There are many traditional forms of gambling – including popular variants such as Teen Patti and Andar Bahar – prevalent in Indian culture.
- COVID-19 pandemic. Also forced to stay at home in self-imposed isolation, Indians began looking for ways to entertain themselves, with many opening up to iGaming.
The factors listed above allowed the major iGaming companies to recognize the potential of India, which translated into major investments in technology and marketing. Brands such as Betway have gained significant popularity by offering various sports betting options, indicating an optimistic future for iGaming in India. However, an increase in the tax rate could destroy this seemingly solid structure.
However, this does not mean a momentary collapse of the industry in India. To navigate the ever-changing gambling landscape, many Indians have subscribed to Bestindiancasinos.co.in, an online service with news, insights, and reviews on online casinos and sportsbooks where tons of useful information is available. With this online service, you can easily find a reliable iGaming platform, which is especially important if you have previously used the products of the recently left Super Group.
Tax Shock – Super Group’s Rapid Departure
The sudden introduction of the 28% GST tax on iGaming revenues came as a surprise to the industry and led to an immediate reaction from some brands. Super Group, a major actor in the Indian gambling market, quickly withdrew its business from this previously very promising market. This exit already affected not only Super Group’s employees but also local companies and affiliates associated with the brand.
However, the market conditions had deteriorated somewhat earlier. At the beginning of this year, the government banned several online gambling apps, including Betway and Parimatch, adding to the industry’s problems. The move hinted that the regulatory environment for iGaming operators was becoming increasingly challenging. This has created uncertainty about the future of the industry and players have begun to reassess their operations in the face of the changing landscape.
Industry Responses and Urgent Discussions
The industry reacted swiftly to these developments. The Federation of Indian Chambers of Commerce and Industry initiated urgent negotiations with the government, seeking a review of the tax policy. Simultaneously, the All-India Gaming Federation made its stand known, challenging the constitutionality of the GST tax rate and warning of the potential destruction of the Indian iGaming industry.
While stakeholders have been closely monitoring the government’s response, the iGaming sector in India has been at a tipping point. Sudden tax increases and regulatory challenges have raised concerns about the sustainability of the industry. Operators were faced with the difficult task of navigating the increased taxes, forcing them to reassess and make strategic adjustments.