ONLINE GAMING INDUSTRY (Syllabus: GS Paper 3 – Economy)

News-CRUX-10     27th September 2023        

Context: The Directorate General of GST Intelligence (DGGI) is anticipated to issue cumulative tax demands of up to ₹1.5 trillion to companies in the online gaming sector for alleged underpayment of taxes over several recent years.

Market of Online Gambling in India:

  • The Indian gambling market is estimated to be worth US$60 billion per year, of which about half is illegally bet.
  • Around 40% of Indian adults have gambled at least once on online platforms.
  • Mobile gaming: The revenue of this industry is expected to exceed US$1.5 billion in 2022, and is estimated to reach US$5 billion in 2025.
  • CAGR: The industry in the country grew at a CAGR of 38% between 2017-2020, as opposed to 8% in China and 10% in the US.

o It is expected to grow at a CAGR of 15% to reach Rs 153 billion in revenue by 2024.

Online gaming and its legality

  • Information Technology Act of 2000: That regulate online activities in the country also has no mention of anything about online gambling.
  • Judicial intervention: As early as 1957, the Supreme Court of India has held the view that competitions that require substantial skill are not gambling activities.

o In recent times also, the SC has reiterated that it is a legitimate business exercise, protected as a fundamental right under Article 19 (1) (g) of the Constitution of India.