Tiger Global, DST Global, Peak XV, Steadview Capital, and Kotak Private Equity are among the global and Indian investors who have urged Narendra Modi to reconsider the recently announced taxation on online gaming.
The Goods and Services Tax Council, composed of senior federal and state finance ministers, announced earlier this month that it had agreed to impose a 28% indirect tax on online gambling, casinos, and horse racing.
Read also: OpenAI introduces customized ChatGPT instructions
The council opined that there should be no distinction between “games of skill” and “games of chance,” thereby closing a loophole that allowed fantasy sports companies to rationalize their offerings as skill-based.
“The decision of the 50th GST Council has the unintended consequence of equating the constitutionally protected legitimate online skill gaming industry with gambling, betting, and other “games of chance,” 30 investors wrote in a letter to Prime Minister Narendra Modi on Friday.
“We invested in this sector with the vision of making India the gaming capital of the world, which would generate, among other things, high-skilled jobs, billions of dollars in foreign capital, and make the country a net exporter of innovation in gaming and allied fields such as animation, artificial intelligence, and visual effects,” stated the letter titled “urgent prayer.”
Read also: The US price of the YouTube Premium individual subscription has increased by $2
Online gaming is one of India’s most rapidly expanding consumer internet enterprises. Fantasy sports startups, such as Dream Sports, which is backed by Tiger Global and Alpha Wave Global and valued at over $8 billion, and Mobile Premier League, which is backed by Sequoia India, have collectively raised billions of dollars as a generation of internet users develops the habit of betting on real-world sporting events in an attempt to make money.
