By Consultants Review Team
According to a new estimate, India's online gaming market is predicted to rise to 33,243 crore by FY28, but the real money gaming (RMG) segment would be under pressure due to the industry's 28% GST levy.
According to EY's recent analysis, titled 'New Frontiers: Navigating the Evolving Landscape for Online Gaming in India,' India has a gaming community of approximately 42.5 crore gamers, ranking second only to China. After rising at a 28% CAGR from FY20-23 to 16,428 crore, the online gaming market is expected to rise at a 15% CAGR till FY28.
The RMG sub-segment, which includes over 400 startups, accounted for 84% of the market share in FY23 and is a major contributor to the online gaming ecosystem.
Despite its dominance, the segment's revenue share is predicted to fall to 75.4% by FY28, owing primarily to recent GST changes. During FY24-28, the industry expects this sub-segment to produce 6,500-6,800 crore in direct taxes and 75,000-76,000 crore in indirect taxes (GST).
The GST Council's 50th meeting proposed raising the tax rate on online gambling to 28%. The final decision was deferred to the GST Council's 51st meeting, where the tax rate hike and valuation revisions were finalized, due to a lack of consensus on the valuation basis.
RMG accounted for 84% of the overall online gaming market in FY23, generating Rs. 1,700 crore in GST. The sector, on the other hand, predicts that with the updated GST rates and valuation methodology, yearly GST collections could increase by 113% CAGR from the FY23 base to an estimated 75,000-76,000 crore by FY28.
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