Following a massive tax hike in India, Super Group, a prominent player in the realm of online sports betting in India known for their flagship brand Betway, has decided to exit the Indian market. India’s imposition of an unprecedented 28% Goods and Service Tax (GST) on iGaming operators has sent shockwaves through the industry. Super Group, the parent company of popular brands like Betway, Spin, and Hyperino, had thrived in India’s growing online gambling market, but the sudden tax increase has forced them to reconsider their presence.
The Tax Hike Impact
The Indian government’s decision to raise the tax rate from 18% to 28% on iGaming revenue has significant implications. Super Group’s withdrawal from India is likely to be the first of many, with industry experts anticipating a ripple effect among online betting and online casinos in India due to the increased tax burden. This tax hike not only impacts the profitability of these operators but also raises concerns about the sustainability of their businesses in the Indian market.
Chilling Effect on Foreign Investment
Many see this substantial tax increase as a deterrent to foreign investment in the Indian iGaming sector. Several operators are expected to reassess their operations in India, taking into account the financial implications of the new tax regime.
Industry insiders are concerned that this move could hinder the growth of the online gambling sector in India, a market that has displayed immense potential in recent years. The decision to raise taxes could not only drive away international operators like Super Group but also deter new players from entering the market.
The government’s rationale behind the increased GST is to exercise better control over the gambling industry. However, history has shown that overtaxation can lead to an increase in illegal gaming activity, as seen in the case of the Philippine Offshore Gaming Operator segment.
Potential Threats to Industry Growth
Super Group’s departure will not only affect its employees in India but also local businesses and affiliates associated with the brand. The company actively participated in sponsorships and partnerships within the Indian sports and entertainment industry, particularly in the eSports segment, contributing to the overall economic ecosystem.
As news of Super Group’s exit spreads, stakeholders in the iGaming industry are closely monitoring the government’s response and considering their own strategies. The Federation of Indian Chambers of Commerce and Industry (FICCI) has received requests for urgent discussions with the government to reconsider the taxation policy. The All India Gaming Federation has also voiced its opposition, calling the GST tax rate “unconstitutional” and warning of potential devastation to India’s gaming industry.
The fate of the iGaming industry in India now hangs in the balance as operators assess their ability to navigate the increased tax landscape. The government’s decision to raise the tax rate has unquestionably set the stage for a critical juncture in the future of online betting in India and online casinos in India.