India’s new 28 percent tax on online gambling companies will stifle foreign investment and jeopardize $2.5 billion (around 20,500 crore) already invested in the sector, more than 100 gambling firms said in a letter to India’s finance ministry.
India this week announced the introduction of a tax on the funds online gaming companies collect from their customers. Games like fantasy cricket have grown in popularity in recent years, but have also raised concerns about addiction among players.
Top investors like Tiger Global and Peak XV formerly known as Sequoia Capital India have invested in Indian gambling companies like dream11 and Mobile Premier League.
In the July 14 letter, gaming companies, including MPL, urged the Treasury Secretary to reconsider the move, emphasizing the impact on jobs and investment.
The tax would deter potential domestic and overseas investors from considering the online gaming sector in India as a worthwhile investment destination, the letter said, adding that it currently has more than $2.5 billion (approximately 20,500 crore) of investments would be at stake based on this decision.
India’s Ministry of Finance did not respond to an email request for comment sent outside normal business hours. German Finance Minister Sanjay Malhotra told Reuters in an interview this week that the government expects the tax to serve both social and economic purposes.
Many Indian ministers view betting on online gaming platforms as a “social evil,” Malhotra had said.
Fantasy gaming platforms revenue increased by 24 percent over the year Indian Premier League As reported by consultancy Redseer this month, the price of the cricket season rose to more than US$342 million (approximately Rs.2,800 crore) year-on-year, with over 61 million users participating.
Users can create a fantasy cricket team for only Rs. 8th.
© Thomson Reuters 2023
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