In recent years, online gaming portals have lured several athletes and celebrities to endorse their various products. More recently, Dream 11, an Indian fantasy sports platform became the principal sponsor of the Indian cricket team. The Indian Premier League has starboaded online gaming through advertisements. The decision to apply GST to online gaming has not gone down well several investors. Prominent investor and co-founder of Bharat Pe, Ashneer Grover, is the latest to criticise the decision.
Was government not outraged by cricketers?
Replying to a Tweet by the Twitter handle @GabbbarSingh, Grover questioned the inconsistency and double standards of the government when it came to implementing GST.
"Also why judgement on online gaming now ? Everyone from @imVkohli to @msdhoni to @SGanguly99 have endorsed online gaming. Why was India public / Govt / BCCI not outraged by all cricketers endorsing? Why was BCCI allowed to take @Dream11 as title sponsor?
Grover further stated how the new decision would scare investors away with its regulatory risk.
"You got billions in from foreign investors as FDI. Celebrated FDI inflow ! Now the same investors will apply regulatory risk discount to India and funds will dry up. Not only for online games - but across sectors. Across startups."
Death of online gaming?
Hours after the government announcement, Grover said the new tax will murder the fantasy gaming industry and that it was time for entrepreneurs to enter politics or this would keep happening.
"RIP - Real money gaming industry in India," he tweeted. "If the government is thinking people will put in Rs 100 to play on Rs 72 pot entry (28 percent gross GST); and if they win Rs 54 (after platform fees), they will pay 30 percent TDS on that -- for which they will get a free swimming pool in their living room the first monsoon - it's not happening!"
"It was good fun being part of the fantasy gaming industry -- which stands murdered now. $10 billion down the drain in this monsoon," Ashneer Grover said referring to his own company Crickpe which allowed users to create virtual teams of the best in-form real players and earn points depending upon their actual performance.
