Global Gaming In India: How Policy Reforms Can Unlock New Opportunities

Games operated onshore and offshore will see tremendous growth and the registration to get a license for online games of skill will enable them to monitor the exact number of operators and players.

Online gaming in India is experiencing a boom, with nearly 430 million players actively engaged in a variety of games. This growth is fueled by India’s position as the global leader in smartphone usage, accounting for over 60 per cent of the world’s mobile market. This vast and expanding base opens up incredible opportunities to onboard more consumers into online gaming — both free-to-play and Real Money Games (RMG), especially skill-based games. The market for games of chance is also substantial, indicating a broad spectrum of consumer interest.

What sets India apart is its vibrant technical talent pool, which continuously drives innovation, crafts compelling narratives, and designs immersive gaming experiences. This has caught the eye of the global gaming community, positioning India as an attractive hub for game development and platform management. With the industry projected to double its revenue within the next five years, it’s clear that strategic policies are needed to keep this momentum going and fully realise its potential.

Key Challenges & Opportunities

Resolving Taxation Issues

One of the biggest hurdles the industry faces is navigating the complexities of indirect taxation, particularly the Goods and Services Tax (GST). Addressing the retrospective GST effect from 2017 is crucial. An amendment to the Central Goods and Services Tax (CGST) Act, by introducing Section 11A could provide relief from tax notices that arise due to unclear laws.

Additionally, reconsidering the enhanced 28 per cent GST rate on skill-based games would prevent stifling innovation. Returning to the earlier practice of taxing Gross Gaming Revenue (GGR) rather than the full face value of bets would provide clarity and incentivise investment in new game development.

Establishing a Unified Regulatory Framework

To foster continued growth and attract international interest, India needs a cohesive regulatory framework. A national-level regulator could streamline the registration and compliance processes for both global and domestic gaming companies.

Defining what qualifies as “permissible games,” including those involving RMG, would allow offshore licensees to register locally and comply with Indian laws, creating a more predictable and attractive business environment. This clarity would also help prevent onshore developers from relocating to other markets with more favourable regulations.

Harmonising Skill and Chance Game Regulations

The fragmented approach to regulations at the state level presents another significant challenge. Differing rules for games of skill and chance force platform providers to deal with multiple registrations and compliance requirements.

Establishing a unified national framework that clearly differentiates between skill-based and chance-based games would simplify operations, reduce barriers to entry, and facilitate smoother processes for developers and platform operators.

Addressing Social Concerns

It’s also vital for the industry to prioritise social responsibility. Implementing measures like Know Your Customer (KYC) protocols, age-appropriate content filters, player limits for time spent and money wagered, and restrictions on misleading advertisements would help create a safer and more ethical environment.

These steps would not only protect consumers but also foster trust within the gaming community.

Unlocking Economic Opportunities

Collaboration between the GST Council, the Ministry of Electronics and Information Technology (MeitY), game developers, and platform providers is essential for resolving these challenges.

When clear, well-defined policies are put in place, they create an environment ripe for growth, attracting more startups, expanding the player base, and boosting government revenues — benefiting all stakeholders.

Addressing Challenges 

Streamlining the Licensing and Registration Process for both onshore and offshore operators would ensure more accurate monitoring of the industry’s key metrics, from player numbers to revenues and tax collections. Early action on these fronts can spark increased innovation and game development, positioning India as a global gaming powerhouse.

With the right support and regulatory clarity, the global gaming industry will be drawn to India, paving the way for technological advancements, bridging the digital divide, and even inspiring educational game development.

Leveraging Technical Talent in India stands at a crossroads, ready to lead the next wave of online gaming growth. The future is bright—if we choose to act now. Online Gaming in India is growing in popularity with nearly 43 crores (430 million) playing the games.

The largest number of smartphones are in India constituting 60 per cent+ of the total mobile universe and it is still growing, enabling opportunities for more and more consumers to board for online unpaid and RMG (Real Money Games) - games of skill.

There is an equal clientele for the online game of chance. This is supplemented by the technical talents to rope in new stories and scripts into online games to make them more and more capturing. Thus, global interest in online gaming either as developers or as managing the gaming platform is tremendous. In the coming five years, the industry in India is expected to double its turnover.

Indirect Taxation is important to resolve loose ends in indirect taxation i.e. GST in terms of the decision to remove the retrospective effect from 2017-2024 as already an enabler amendment has been done giving discretion to the Center and State to exempt retrospective imposition of GST.

It realised the potential of India to become a hub for the online gaming industry by developing newer games. It is important that its economic opportunity and policies are to facilitate the same. 

The suggestion of the law committee to amend the Central Goods and Services Tax (CGST) Act 2017 by introducing of new section 11 A can be used for seeking relief from retrospective tax notice as an issue of interpretation of law and lack of clarity.

Thus, the imposition of an enhanced 28 per cent of GST from 18 per cent, on games of skill is to be decided by giving relief to the retrospective tax imposed from 2017 onwards and also resorting to imposition of GST like in the past on Gross Gaming Revenue (GGR) earned by the gaming operators and not on the full face value of bets, stakes etc that is neither a goods nor service. That clarity is needed for online gaming to again invest in innovation and create newer games.

Identifying Regulators to Register for the global online gaming industry will then be encouraged to register and thus, will be subjected to the law of the land for taxation as well. The offshore licensees’ will have the opportunity to register in India and operate. The onshore developers and developing platforms will not find it lucrative to migrate.

The official release of parameters that define the ‘permissive games’ even though they may be RMG is the need to ease out the functioning. 

Common Mechanism at the National Level for subjecting to parameters distinguishing game of skill from game of chance and enabling registration.

Online games of skill having different mechanisms by each of the states will create lots of impediments for the platform providers requiring multiple registrations and compliances. 

Ensuring Social Concerns that are addressed by each of the games include KYC, no misleading advertisements and filters for age and also a mechanism for players to set the limits for time spent and amount to bet.

GST council, MeitY, Game developers & Platform providers are to adopt and that clarity will enable the opening up of economic opportunities for the start-up industry, increase of user base and in the process add to the revenue of the Government. It leads to a win-win situation for each of the stakeholders. The facilitating policies at the earliest will enable for triggering more and more online game developers in India and making India a hub. 

Games operated onshore and offshore will see tremendous growth and the registration to get a license for online games of skill will enable them to monitor the exact number of operators and players, turnovers and the taxation regime. The global gaming industry will register in India along with local developers enabling more and more innovations and better technology to develop games for educating and bridging the digital divide. 

(The author is a Practitioner Development Economist and Retd Secretary GoI)

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