In a recent decision, the Indian government, during the 50th meeting of the GST Council held on 11th July, recommended a uniform taxation of 28% on “casino, horse racing, and online gaming.” However, this move triggered concerns within the Indian gaming and esports community, as the government mistakenly categorized online betting and gambling under the umbrella term “online gaming.” To clarify the situation, Vinod Tiwari, the President of the Esports Federation of India (ESFI), has stepped forward to explain that the 28% GST would only impact gambling apps and not the video games or esports industry.
Understanding the Distinction: Online Gaming vs. iGaming
At the core of the issue lies the mislabeling of online betting and gambling as “online gaming.” Internationally, the correct term for this sector is “iGaming,” which refers to online real money games such as fantasy sports, teen patti, rummy, and poker—activities that are commonly associated with gambling and betting. Vinod Tiwari emphasizes that the 28% GST applies only to the iGaming sector, making it crucial to differentiate between online gaming and iGaming for clarity.
Request for Official Distinction
To address the confusion surrounding the terms, the government proposed a draft amendment for the Information Technology Rules in January 2023, aiming to establish a taxation framework for the “online gaming eco-system.” However, the gaming community quickly appealed for a clear distinction between online gaming and iGaming. Tiwari suggests that the GST Council should have used the more specific term “iGaming” or “online real money game” instead of the broad label “online gaming.” The definition of online real money games is already outlined in the Information Technology rules, making the distinction feasible.
Preserving the Image of Esports and Video Games
Vinod Tiwari expresses his regret over the unjustifiable association of India’s Video Games and Esports Industry with iGaming, betting, real money gaming, and gambling. This misperception creates unnecessary confusion and tarnishes the reputation of esports. It is essential to dispel these misconceptions and understand that the esports industry is a legitimate and skill-based sector, different from the realm of iGaming.
Esports’ Growing Relevance in India
Despite the concerns, the recent recognition of esports as a mainstream sport in India signifies its growing importance. Notably, esports was featured as a demonstration title in the Olympic Virtual Series for Tokyo Olympics 2020. Furthermore, it has been recognized as a medal sport at the 19th Asian Games and will continue to be one in the upcoming 20th Asian Games Aichi-Nagoya 2026.
The Indian government is also taking steps to support the esports community. The Madhya Pradesh sports department’s announcement of a new online gaming academy is evidence of the authorities’ interest in fostering esports talent within the country. Moreover, India’s participation in the 19th Asian Games includes four video games, namely League of Legends, FIFA Online 4, Street Fighter V: Champion Edition, and Dota 2.
In conclusion, the recent GST Council’s decision to impose a 28% GST on “casino, horse racing, and online gaming” caused concerns within the Indian gaming and esports industry. However, the President of the Esports Federation of India, Vinod Tiwari, has clarified that this tax will not apply to the video games and esports sector. The misunderstanding arises from the mislabeling of online betting and gambling as “online gaming” instead of using the correct term “iGaming.” The government’s decision to recognize esports as a mainstream sport demonstrates the industry’s increasing relevance in India, and measures to support the esports community show promise for its growth in the future.
