Mounting regulations and rising tax loads have been weighing heavy on online gaming, particularly in the real-money gaming (RMG) space. The industry, however, stayed in the game with hopes of a relief running high in the run-up to Finance Minister Nirmala Sitharaman’s Union Budget speech tomorrow (1 February).

After the Union Budget 2023-24 fell short of expectations with no specific mention of online gaming or policies aimed at addressing its concerns, the industry hopes that the FM will this year help it secure regulatory clarity and move along the growth path.

Despite the industry’s anticipation, the promised “review” of a hike in the GST rate on services from 18% to 28% on deposits remained unfulfilled. This uncertainty has left stakeholders grappling with a lack of clarity in direction.

The sector turned vocal about a slash in the GST rate as the budget neared. The stakes are high as illegal betting platforms have seen a surge in transactions, amounting to INR 8.2 Tn, while users continue to migrate to offshore platforms due to the increasing tax burden on domestic operators.

An Ernst & Young and USISPF report had earlier projected that the online gaming sector would create 250,000 jobs by 2025, but in the new tax regime, this estimate has been hacked to just 30,000. A staggering 83.3% of companies are now facing significant challenges in expanding their workforce.

While real-money gaming companies bear the brunt of these tax policies, sectors like video gaming may have different expectations, as online gaming stakeholders will also be keenly monitoring the developments in industries such as semiconductors, AI skilling, startup taxation, and customs duties on tech components – sectors that could indirectly impact the gaming ecosystem.

As the Union Budget 2025-26 is now just a day away, it’s time to take another look at the wish list of the online........

© Inc42