Are governments stifling online gaming?

• The Economic Survey 2024-25 calls for accelerated deregulation and calls for the government to “get out of the way” to allow businesses to operate.

• The gaming sector is a potential target for deregulation, with the Union government’s retrospective GST demand on the sector of ₹1.12 lakh crore causing concern.

• Online skill-based gaming is a growing sector with three startups turning into unicorns.

• Online gaming is one of the fastest-growing sectors in India, accounting for ₹33,000 crore in 2023 and projected to reach ₹66,000 crore.

• Union and State governments have unanimously imposed a 28% GST on online gaming, a rate usually reserved for public ‘harms’ such as gambling, liquor, and tobacco.

• The government’s efforts to wring the online gaming sector dry are seen as a black warrant for online gaming, leading to smaller startups going bankrupt or shutting down.

• An effective way for the government to commence its new wave of deregulation would be to rationalize GST rates and co-craft a regulatory framework with the online gaming industry.