Super Group Pulls Out of India over New Online Betting Tax
I recently raised the topic of the introduction of new taxes on online gambling from the country’s government and now the expected action from the operators directly affected by it has already sprinkled in. Betway operator Super Group has withdrawn from the Indian market in protest at the new tax rates introduced this month.
According to the new regulation, every online operator will be forced to pay a flat 28% sales tax on online gambling, casino betting and horse racing. India’s Goods and Municipal Tax (GST) came into effect on October 1, with deliberations starting in July.
Supergroup has made a clear assumption that the new rules mean that it will definitely bring a collapse of the reputation and vitality of the Indian market in India. Therefore, all services have been terminated with immediate effect.
Neil Menashe, CEO of Supergroup does not leave this problem unaddressed and on occasion voices his assumptions and concerns. Here is also one of his quotes: “We are constantly evaluating regulatory changes in many of the markets we serve. Based on our many years of experience doing business in various geographic regions, we are confident in our long-term growth prospects.”
The tax is a sales tax because it applies to the full nominal value of bets and not to the gross gaming revenue (GGR). For on-line gambling, the tax is charged on the full face value of bets wagered by operators.
In land-based casinos, the tax is levied on the face value of the chips purchased at each establishment. If we look at the tax and how it is levied on horse racing, the tax is levied on the full value of bets placed at bookmakers and betting shops.
Back when there were persistent discussions in July about the government’s plans to introduce the tax, as you may have noticed, the All India Gaming Federation (AIGF) immediately and strongly commented that the decision would be a market crash for the industry and would create a lot of difficulties and most likely unlicensed underground activity.
The AIGF is the leading gambling industry body in India and told iGB that the new tax with all these fixed figures will be poorly received by online operators. And here there were additions regarding unlicensed operators that may come up due to such a decision from the government.
According to AIGF, this resolution is extremely damaging to the total Indian gambling industry as GST on deposits will increase liabilities by 400-500 per cent, resulting in thousands of job cuts.
More significant changes in the Indian market
In fact, the gambling industry is abuzz with upheaval and innovation this year. New tax rates are the second major change in the Indian online gambling market this year. In January, the Indian government also announced new rules to regulate online gambling. These edits state that online gambling must not contravene existing legislation. Among other things, it deals with the prohibition of gambling at the state level. Moreover, the draft document contains proposals for the creation of self-regulatory bodies. This will include companies engaging in Internet gambling, which will be in charge of setting industry rules.
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