One month after the introduction of the 28% GST, online money gaming companies are exploring different strategies to retain player engagement. While most industry participants are adopting a cautious approach, some are considering options like subscription services, coupons, and cashback offers to counter the GST’s impact on players. Meanwhile, larger companies are reportedly deliberating whether to temporarily absorb the tax burden for their customers.
An industry insider said that, “It’s currently in the initial stages, and the 28% GST hasn’t had a significant impact so far. This is partly due to the fact that many players are still unaware of the new GST rate. In fact, most of them are only beginning to understand the implications of the TDS in online gaming”. They also noted that it usually takes around four to five months for the tax effects to manifest at the ground level. The majority of online gaming firms have been actively adapting to comply with the GST alteration. The source mentioned that, “from a technological point of view, coordinating systems with the new GST regulations has presented a substantial challenge.”
Online money gaming companies are currently exploring strategies to retain players and mitigate the effects of the tax. Industry players reveal that certain companies have initiated the distribution of vouchers and coupons to players, while others are introducing subscription models that remove platform fees for players.
Companies like Dream11, Fantasy Dangal, and Mobile Premier League are already offering cashbacks and vouchers to their users. According to a source, the concept is that when a player deposits Rs.100 into their wallet and Rs.28 is deducted as GST, the company will compensate the same amount in the form of a voucher or cashback. However, the sustainability of this practice remains uncertain.
Due to the uncertainty surrounding the effects of the 28% GST, online money gaming companies have been reducing their advertising expenditures in recent weeks to control costs. However, the industry is keeping its expectations focused on the GST Council’s commitment to review the tax six months after its implementation.
After decisions made by the GST Council in July and August, a 28% GST on online gaming, horse racing, and casinos was implemented starting from October 1 of this year.
