Recently, key stakeholders from the Real Money Gaming (RMG) sector met with senior officials from the Ministry of Information and Broadcasting (MIB) to discuss crucial industry issues. Among their demands was the introduction of an MIB certification and quality seal to help differentiate legitimate RMG companies from illegal offshore betting apps.

The RMG industry has faced regulatory uncertainty for over nine months, with no significant policy developments. This has left many RMG startups struggling with increased tax burdens, impacting their profitability and growth. Meanwhile, illegal offshore betting companies continue to expand their user base and revenue from India.

Until October of last year, online gaming companies typically paid an 18% GST on platform fees or commissions. However, the GST Council's decision to impose a 28% GST on entry fees has significantly increased the tax burden on gaming startups. This tax is applied to the total amount of bets placed, regardless of whether the game involves skill or chance.

According to a report by Think Change Forum (TCF), the offshore sports betting market, which has been growing at a rate of 20% annually post-pandemic, receives around $100 billion in deposits from India each year. Despite regulatory efforts, this illegal market is expected to continue growing, leading to a projected tax loss of ₹6.72 trillion by 2026 under the current GST regime.

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