Gaming industry experts asked Indian Government to define distinction between Real Money Games and Video Games

A few days ago, the Indian government announced its decision for imposing a 28 percent Goods and Service Tax (GST) on Online games. This news left everyone's jaw dropped, however, there was a misconception in the air without much information. 

Due to this many PR agencies and companies got triggered and started a campaign. The error aroused in the gaming world, as some mistook RMG ( Real Money Games) and Fantasy Sports with Video Games and Esports. 

To stop further misconception, The Indian Video Games industry penned a petition for PMO, MeitY and I&B Ministry while urging them to clear the confusion. 

In accordance with the global definition of iGaming, RMG/Fantasy ought to be referred to as such. The press release includes the letter and the signatures of those involved, and the following essential information.

Some Personalities from the Video Gaming world shared their comments with the petition:

The Founder and Game Director Harish Chengaiah at Outlier Games penned,

"Lots of dramatic statements were shared that claimed the doom and gloom of the Indian games industry.
Let’s break this myth — The Indian video games industry is thriving, with a focus on innovative
R&D-driven productions and plans to release two dozen video games based on original IPs in the next
five years, exporting Indian stories, character brands, and ethos globally.
We are actively contributing to government initiatives such as ‘Create in India’, ‘Brand India’, and ‘1
Trillion Digital Economy’. Moreover, we are attracting notable strategic foreign direct investment and
mentorship programs like the ‘India Hero Project’ from Sony Interactive Entertainment and unparalleled
support from the government in the form of the AVGC-XR Policy. Indian video games industry is a sunrise
sector today but in 3-5 years it is undoubtedly going to be a sunshine sector."

Co-Founder and CEO of SuperGaming Roby John wrote,

Gamers know the difference between Real Money Gaming, Fantasy Sports, and video games. The rules
should evolve to reflect these differences as well. This would ensure the best practices — and more
importantly — protections for India's 500 million plus gamers.

The Founder and CEO of GameEon Studios wrote,

India possesses immense potential in the gaming space, with a strong presence in mobile, PC, and
console gaming. Despite recent concerns surrounding the 28 percent GST, it is important to note that the
overall gaming industry remains resilient and unaffected. Moreover, it is crucial to dispel the
misconception that this tax applies to non-Real Money Games and non-betting games. Such a
misrepresentation and distortion of facts from reality undermine the vibrant gaming ecosystem that
continues to thrive in India.

 

The Co-Founder of DIOSC Gaming Biprajyoti Chakraborty wrote,

In a country like India where video gamers are still very young and new, it is really important for the
government to clarify the necessary laws and rules associated with it to create a sustainable environment
for the industry to thrive. Misinformation and unclear rules & regulations can lead to the destruction of the
Indian gaming industry which has the potential of becoming the industry leader in game production.

Co-founder and CEO at Hypernova Interactive Mayur Bhimjiyani wrote
 

Video Games are a cultural phenomenon with stories. They are about shared moments of joy with friends
and family. They are about music and entertainment! Think of them as movies. You buy a ticket. You
watch a movie. You enjoy yourself. You don't expect to make a profit. Real Money Games are more
transactional in nature, they are about “Bet X to Win Y”. The GoI has been very consultative with the
video game industry and has given a clear definition of such Real Money Games and defined them as
“Online Games”. And these “Online games” are the ones that have been impacted by the 28 percent GST
announcement. Not Video Games.

CEO and Found of Penta Esports Anurag Khurana wrote,

While the revised GST of 28 percent will be levied on “Online Games”, it certainly does not apply to
esports. It should be made clear that the 28 percent GST is for games which involve staking/wagering of
money. Esports inherently does not involve any form of the staking/wagering elements and hence has no
impact.

Managing Director of GodSpeed Ranbeer Hora wrote,

The recent announcement of imposing a 28 percent GST on casinos and Real Money Gaming doesn't
come as a surprise to me. However, there seems to be a misunderstanding circulating on various social
media platforms, suggesting that this taxation applies to video games as a whole. This is an incorrect
interpretation, as the statement clearly states that the taxes are applicable to the full face value of bets in
online gaming, casinos, and horse racing. It is crucial to understand what falls under the category of
online gaming in this context, as it encompasses the aforementioned genres as well as Real Money
Gaming. Industry representatives have been engaging in ongoing discussions with the authorities to
establish a clear distinction between video games and the genres mentioned above. This is the need of
the hour and will help in framing the correct set of rules for the video games industry and will prove to be
rewarding for the growth of this sector.

Founder & CEO of Street Lamp Games: Deepak Gurijala wrote,

Video games are an immersive form of entertainment, fostering creativity, skill development, and social
interaction. They are distinct from Real Money Games, which involve gambling and monetary
transactions. It is essential to understand the government's decision to differentiate these two realms is
crucial, as it helps to debunk the misconception that video games and Real Money Games have similar
taxation policies. This clarity is of utmost importance, as the misconception brings uncertainty to fellow
game developers and the gaming industry, hindering their ability to innovate and contribute to the vibrant
gaming ecosystem.

Co-Founder and Managing Director of Weloadin Studio Mario Royston wrote, 

It is worth noting that RMG and Fantasy Sports are not considered part of the video game industry in
other countries. However, the negative focus on RMG has led to misconceptions about the entire video
game industry in India for a considerable period of time. The classification of Real Money Gaming (RMG)
and Fantasy Sports as online gaming has had adverse effects on the video game industry in India,
primarily due to concerns about the wagering aspects associated with RMG. Recognising the need for
clarity, the Indian government has taken steps to differentiate RMG and Fantasy Sports which involve
Real Money betting from the video game industry which is purely made to entertain and educate people
as a form of art like movies. This differentiation is evident through the implementation of a 28 percent
(GST) specifically for RMG and Fantasy Sports, while video games are subject to an 18 percent (GST)
rate.

Founder & CEO, XSQUADS Tech Jemish Lakhani wrote, 

The Indian video game industry is becoming self-reliant (Aatmanirbhar), but a 28 percent GST on all
game types could stall its growth. We must differentiate between Real Money Games and Video Games
to avoid negative impacts. By fostering a favourable tax structure, we can unlock the Video Game
industry's economic potential, boost India's position in the global gaming market, and secure billions in
future revenue for the country.
 

Founder & CEO, Lucid Labs Chirag Chopra wrote, 

Yet again, the Indian gamer finds himself strangled in a pile of unwanted mud. Let me simplify it for you:
imagine you have a basket filled with both apples and oranges. Now, just because they share the same
basket doesn't magically turn them into the same fruit, right? Just because Real Money Games and your
favourite games share the same industry, it doesn't automatically put them in the queue for similar tax
treatment. The government knows better, and so do you, my fellow Indian gamer.
Let me break the bubble - the Indian game industry is more than Real Money Games, and believe it or
not, they are here to stay. No matter what they try to tell you on social media, your beloved games will not
be taxed 28 percent; that privilege is reserved for your truly, Real Money Games. So, as long as you are
not chasing the fake paradise, you can continue enjoying your Clash of Clans, Valorant, and PUBG.

Founder & Director, Firebolt Entertainment Tarun Hinduja wrote,

With every new law, comes some amount of misinterpretation. The GoI has always frowned at gambling
in any form and has now strengthened its stand by imposing a 28 percent GST on Real Money Games. It
is important to understand that there is a difference between Games such as Candy Crush, PUBG, etc
and Real Money Games (anything that involves any kind of wagering). This clear distinction should only
help boost the already growing gaming industry in India.

All the petitioners are now looking forward to hearing from the government about the future of the Indian video games industry and how it's going to affect the gaming industry in the future.