The inclusion of Esports as a demonstration title in 2018 and its full-fledged debut as an official medal sport at the 19th Asian Games
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Online gambling, horse racing, and casinos will now be subject to a 28% GST, according to the announcement made at the Goods and Service Tax Council’s 50th meeting, which was recently held in New Delhi. It has been questioned whether this will have an impact on the Indian Esports business, which has a sizable player base of over 400 million. The 28% GST will only be applied to the iGaming industry, which includes Real Money Gaming, fantasy sports, teen patti, rummy, and poker, which are regarded as gambling or betting activities in the rest of the world, according to Mr. Vinod Tiwari, President of the Esports Federation of India and acting Director General of the Olympic Council of Asia. On the other hand, this tax has no impact on the Esports sector.
Mr. Tiwari emphasizes that Esports has been officially recognized as a sport by the Indian government, distinguishing it from iGaming activities like fantasy sports, teen patti, rummy, poker, betting, and gambling. Hence, Esports will continue to be taxed as it always has been. The concepts of ‘game of skill’ and ‘game of chance’, which are unique to India and applied to certain activities, do not have any relevance in the Esports ecosystem.
In April of this year, the Indian government made amendments to the Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021, which laid out a comprehensive framework for the Online Gaming Eco-system. Mr. Tiwari suggests that instead of using the broad term “online gaming,” the GST Council should have opted for the more specific term “iGaming,” which is recognized worldwide. Alternatively, the term “online real money game” defined in “The Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules” could have been used to avoid confusion.
Mr. Tiwari stresses that the primary objective of the 400 million Indian video gamers, and approximately 3 billion gamers worldwide, is purely entertainment and not financial gains or making money. It is unfortunate that in India, the Video Games and Esports Industry are often unjustifiably associated with iGaming, betting, Real Money Gaming (RMG), gambling, and other activities, leading to unnecessary confusion and misperceptions.
Moreover, it is essential to highlight that video game publishers strictly prohibit implementing entry fees for any Esports events organized using their video games. This clear policy further separates Esports from iGaming activities.
The inclusion of Esports as a demonstration title in 2018 and its full-fledged debut as an official medal sport at the 19th Asian Games, with India participating in titles such as League of Legends, FIFA Online 4, Street Fighter V: Champion Edition, and DOTA 2, showcases the strides the industry has made to establish itself as a mainstream sport within the country. Additionally, Esports has been officially designated as one of the medal sports in the 20th Asian Games Aichi-Nagoya 2026.
The 28% GST will only apply to iGaming activities, sparing the Indian Esports industry and its immense player base from any tax implications. The official recognition of Esports as a sport and its inclusion in major international multi-sport tournaments highlight the industry’s growing importance and legitimacy as a mainstream form of entertainment and competition.
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