Recently Introduced 28% GST Tax Implemented In India Leads To Super Group’s Exit

Super Group has become the first casualty in India following the country’s controversial decision to impose a 28% Goods and Services Tax (GST) on iGaming operators. The global sports betting operator announced its immediate withdrawal from the Indian market just days after the implementation of the new online gambling tax rate.

As the parent company of successful brands such as Spin, Hyperino, and Betway, Super Group has played a significant role in the development of India’s thriving online gambling market. However, the sudden surge in taxation rendered the Indian market no longer financially viable for the company.

This is certainly quite the adjustment for many licensed providers operating in India, including the ones featured on NoDepositFriend, but the reality of the situation is that they must either accept it or follow in Super Group’s footsteps.

Missing The Mark

While Super Group may have been the first to exit, industry experts anticipate a domino effect among iGaming operators, all set to bear the brunt of India’s latest tax burden. The unprecedented tax hike not only poses a significant threat to their profits but also raises concerns about the viability of their businesses in the country’s increasingly unattractive landscape, prompting a reassessment of their operations.

This move is also expected to hinder the growth of India’s iGaming sector, discouraging new players from entering the market due to the severe financial implications of the increased GST regime. Additionally, mass layoffs are anticipated as more operators follow Super Group’s lead by exiting the country entirely.

Its is also important to note that Super Group was also involved in several sponsorships and partnerships within the Indian sports and entertainment industry, as such their departure is expected to not only impact its employees but also all the businesses and affiliates that worked with the brand.

The All India Gaming Federation (AIGF) strongly criticized the government’s decision when it was first announced in July, contending that it would substantially hinder the survival of businesses. Furthermore, the leading industry body for online gambling in India asserted that this could, in turn, steer players towards unlicensed operators, as witnessed in the case of the Philippine Offshore Gaming operators, leaving them vulnerable despite the government’s aim to utilize the tax hike to gain better control over the gambling industry.

More Changes

The increased tax rate is not the only recent change implemented by the Indian government. At the beginning of this year, the country introduced a new set of regulations, establishing a series of “self-regulatory” bodies to oversee the sector. These bodies, comprising an individual representing players, an online gaming, sports, or entertainment professional, and a public policy or psychology expert nominated by the government, were tasked with creating a new iGaming framework to protect players’ interests, prevent financial crimes, address addiction, and curb harmful gambling habits.

In an effort to strengthen its measures for regulating gambling and related services in India, the government also recently released an advisory paper urging the immediate removal of all advertisements promoting gambling products across various platforms, including newspapers, online news outlets, television channels, and social media platforms. The Ministry of Information and Broadcasting emphasized that these types of advertisements can have significant financial and socio-economic impacts on vulnerable individuals such as young adults and children, and can also be linked to money laundering, thereby jeopardizing the country’s financial security.

What’s Next ?

The fate of India’s iGaming industry now hangs in the balance as operators contemplate how to navigate the altered tax landscape. Stakeholders have already begun pressuring the Federation of Indian Chambers of Commerce and Industry (FICCI) to engage with the government for a reassessment of the taxation policy. Industry experts have also voiced concerns that the hefty 28% tax burden could result in additional charges imposed on customers.

While the actual ramifications of the government’s tax increase are yet to be fully realized, the country’s rapidly growing industry, valued at close to $2 billion, is expected to endure a significant blow, with some even suggesting that it may face complete annihilation. This recent development follows several reports from various parts of the country highlighting major losses and escalating addiction rates among fantasy cricket players and online card gamers.