Super Group, the overarching company overseeing well-known betting entities Betway and Spin, has formally declared the cessation of all its operations in India. This determination is a direct response to the Indian government’s enactment of a novel Goods and Services Tax (GST) that took effect on October 1, 2023.
During the preceding summer, India’s Parliament endorsed the establishment of the Goods and Services Tax Council (GST) with the principal goal of revising tax rates applicable to companies providing gambling services, irrespective of their origin. Within the recently sanctioned GST structure, a substantial turnover tax of 28 percent will be imposed on all services related to online gambling, land-based online casinos, and betting..
Loss of Appeal in the Indian Market
Super Group issued a statement elucidating their decision, asserting, “The newly implemented tax regulations render the Indian market economically unfeasible for Super Group.” The abrupt departure from the Indian market is deemed imperative due to the considerable tax burden placed on the company.
The GST Council, comprising the Union Finance Minister and representatives from each state and union territory in India, possesses the authority to determine tax rates, exemptions, and administrative processes linked to the GST.
Despite the withdrawal from India, Super Group’s management maintains optimism about its financial outlook for the entire year, as indicated in its Q2 trading update. Neal Menashe, the CEO of Super Group, emphasized the company’s commitment to adapting to evolving regulatory landscapes in the diverse markets they operate in. He affirmed, “Informed by years of operating our geographically diverse business, we remain confident about the long-term growth opportunities in front of us.”
This decision to halt operations in India underscores the extensive impact of tax policies on multinational corporations engaged in the country’s gambling and betting sector. Super Group’s exit will undoubtedly create a void in the Indian market and underscores the significance of regulatory clarity and taxation policies for businesses in the industry.
Background on Taxation of Gambling Companies in India
In India, regulations concerning gambling and betting largely fall under the jurisdiction of state governments, each possessing the authority to regulate and tax gambling activities within its boundaries. Consequently, tax rates and policies related to gambling services may vary from state to state. Some states have their tax structures for gambling and lottery activities, adding an additional layer of taxation for gambling companies operating in those regions. With the rise of online gambling platforms, attention has grown on the taxation of online gambling services. The implementation of GST and the introduction of digital services taxes in some states have sparked debates on the appropriate tax treatment for online gambling activities.
The taxation of gambling services is intricately tied to regulatory changes and evolving public attitudes toward gambling. India has a complex legal framework regarding gambling, with some states prohibiting certain forms of gambling while others permit it under specific conditions. Taxation policies typically align with the regulatory framework in each state.
