India’s Online Casino Tax Grab

India’s authorities are no strangers to cooking up new taxes, but the latest one for the online casino industry could achieve the opposite of their intentions. Read on to find out how it will harm player interests and potentially reduce rather than increase revenues for the authorities.

New Tax for Online Casinos in India

Online casinos are very popular with India’s players, who have plenty of establishments from which to choose. Eager to make money, India’s authorities have put together a controversial new tax grab related to online casino betting. The gambling tax is set to rise from 18% to 28%, which is a hefty hike, but that is perhaps not the most unwelcome aspect.

The 18% tax rate was based on net income, which aligns with common practice for personal and business taxes worldwide. One of the major flaws of the new tax is that it will pay the 28% rate on revenue. The rather obvious drawback of this is that an online casino could make a loss or break even yet still be liable for a substantial tax bill.

The iGaming market in India is flooded with numerous casino operators and providers, but not all of them can boast with remarkable reputations and top-notch user experiences. That’s why players need to distinguish the premium casino sites in India and opt out of operators that deliver first-class entertainment.

Top Online Casinos in India

With over 1.4 billion inhabitants, it’s a statement of the obvious to say that India has plenty of keen bettors within its borders. While different parts of the country take differing views of the pastime, ranging from enthusiastic support to being rather less positive, playing online is incredibly popular. When browsing for the top Indian online casinos, a quick and easy trick to save time is to check the premium selection compiled by experts. This narrows the smorgasbord of potential places to play down to a concise collection of leading sites with the best selection of bonuses, slots, table games, and banking methods for players from India.

India’s Love Affair with Red Tape and Tax

One of the potential strategies the best online casinos in India might adopt if the 28% revenue tax rate gets the green light is to leave the market altogether. Having a combination of a high rate and one targeted at revenue rather than profits/net income is a massive disadvantage and something that online casinos will work hard to avoid. This will be self-defeating for tax enthusiasts if it comes to pass, as 28% of nothing is far less than 18% of net income. And it would not be the first time that India’s authorities drove away what should have been easy business by an excessive fondness for red tape and tax.

Formula 1 is a globe-trotting sport that loves having venues in multiple continents, from old-school European circuits to tracks in North and South America, Oceania, the Middle East, and the Far East. India used to be on its calendar, but it held only three Grands Prix on the subcontinent. It was meant to return but was canceled due to a dispute with the government of Uttar Pradesh. Chief Minister Akhilesh Yadav described F1 not as a sport but entertainment, levied taxes accordingly, and so just three Indian races were held, and F1 left, never to return.

It remains to be seen if India’s infatuation with tax grabs will end up chasing off more business and thereby reduce rather than increase revenue. When faced with such a massive financial blow, online casinos may leave India rather than accept such tax gouging.

Skill and Chance Treated the Same

Casino games include diversions that are wholly or almost entirely down to chance, such as slots and those that are mostly/wholly down to player decisions and skill, including blackjack and poker. However, the new tax hammer will hit all activities equally. Given the stark difference between amateurs and pros playing card games in tournaments or at live streaming tables. The individuals are trying to get lucky and win a big prize by chance with a progressive jackpot slot. It seems particularly unfair to strike both with this financial punishment.

Another Strategy for Online Casinos

The 28% revenue tax is currently not implemented but is a distinct possibility as a replacement for the present arrangement. In addition to driving out many online casinos in India, the approach may see others fold as businesses, reducing the number of available sites for players from India to enjoy. This would also reduce the tax base and lead to revenue for the authorities going down rather than up.

Another approach online betting sites might take to shoulder the immense financial burden of this new tax measure, should it come in, is to alter their profit margins. Currently, online casinos offer a better chance of winning than brick-and-mortar casinos because the latter have extra costs related to operating a physical establishment. However, online casinos could deliberately reduce the chances of players winning to build up sufficient income to weather the storm of the new Indian tax. This would work by removing games with minimal house edges and promoting slots and other games with lower RTP (return to player). Whatever happens, with departure, failure, or a bigger house edge, this would spell bad news for Indian players.

It remains to be seen whether the 28% revenue tax will come into force, but if it does, it may end up killing the golden goose rather than securing more eggs.

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