Union Cabinet has cleared Online Gaming Bill: Key takeaways
What's the story
The Union Cabinet, headed by Prime Minister Narendra Modi, has approved the Online Gaming Bill. The proposed legislation aims to regulate the misuse of online gaming platforms and curb illegal betting activities that might pose risks to national security. It introduces strict provisions for penalty, punishment, and even the banning of online games involving betting or gambling.
Endorsement ban
Bill prohibits celebrities from promoting betting games
The Online Gaming Bill also prohibits celebrities from endorsing or promoting betting-related gaming apps. Legal action will be taken against those who violate this provision. The legislation distinguishes between the entertainment-focused online games and those involving money and wagering, with normal online games not facing restrictions.
Tax considerations
Online gaming apps may come under GST
The government is also considering bringing betting-related gaming apps under the Goods and Services Tax (GST) category of "sin goods." This could result in a levy as high as 40%. The step is part of the Centre's broader effort to regulate the fast-growing online gaming industry, prevent its misuse, and ensure safeguards against financial fraud and other unlawful activities.
Industry growth
Online gaming industry to reach $9B by 2029
India's online gaming industry is expected to grow from $3.7 billion in 2024 to $9.1 billion by 2029, according to a joint report by WinZO Games and IEIC. The growth will be driven mainly by real-money games, which are expected to contribute nearly 86% of revenues. The government has already imposed a 28% GST on online gaming since October 2023 and taxed player winnings at 30% starting FY 2024-25.