New GST regime pushes smaller gaming platforms to the brink

Akanksha Sarma

4 reads

Akanksha Sarma

4 reads

The government’s decision to levy 30% GST on the full face value of bets on real-money gaming platforms is likely to cause an exodus of users. With prize pools shrinking as a result, this could render smaller gaming firms unappealing and, ultimately, unviable.

July 19, 2023

7 MINS READ

Key Takeaways

The July 11 decision to levy 28% GST on the full face value of real-money gaming bets has upended the gaming sector
While the tremors caused by the decision will shake even larger players such as Dream11 and MPL, they could cause smaller platforms to crumble
The exodus of players expected as a result of the new GST regime is expected to shrink prize pools and raise customer acquisition costs
This will adversely impact smaller platforms that rely on small tournaments for most of their business, forcing them into competition with far larger rivals

This year’s Indian Premier League—the world’s most lucrative T20 cricket tournament—was a goldmine for the country’s various real-money gaming (RMG) platforms.

With brands like Dream11, Games 24xSeven’s My11Circle, and MPL emblazoned on the jerseys of the tournament’s teams, 61 million Indians flooded into gaming platforms for a taste of the prize money on offer, according to a report from market research firm RedSeer. All told, the report states, these companies raked in Rs 2,800 crore over the course of the two-month-long tournament.

With multiple unicorns in the fray, the feel-good factor was palpable in the RMG sector.