Will the Decision on GST Have an Impact on New Casinos Launched in the Indian Market?

Photo for representational purpose

The Indian government has created a panel of state ministers to examine the valuation of racecourses, online gaming, and casinos in order to better inform the levying of goods and services tax (GST).

The panel of seven members will examine every aspect of the valuation of these services in terms of their worth for GST. The members will also look into whether any legal changes are necessary in order to better provide an accurate valuation. In addition, the group will consider the administration of any valuations and whether a different valuation method should be adopted.

What is the role of the panel?

In addition to its basic remit, the panel will also examine the impact of any valuation on services such as the lottery. Members of the panel, including Maharashtra Deputy Chief Minister Ajit Pawar and Goa Transport Minister Mauvin Godinho, will report to the GST Council which is chaired by the Union Finance Minister and comprises state Finance Ministers. The report will be submitted within six months.

The work of the panel is much needed at this time as the online gaming sector, including casino games, is experiencing a period of significant growth. This growth is leading to much industry uncertainty regarding the valuation of gaming, horse racing, and casinos. When the panel submits its report, it will help to address this uncertainty.

Right now, these sectors attract 18% GST. Once the work of the new panel is complete it will become clearer whether this valuation is likely to change if revised valuation processes are suggested and implemented.

Will the decision lead to the launch of more India based new casinos?

One of the big questions that has been asked since the panel was created is whether this step will have an effect on new casinos in India. The truth is that the legal situation regarding casinos in the country remains complex and casino gambling is still not legal in many states.

The situation with online casino games is slightly different as although there are legal restrictions on India based providers it's not illegal for players to use offshore casinos. It's possible that restrictions will start to be eased on domestic online casino providers depending on the ongoing valuation investigations.

We spoke to one of the industry experts at Just Gamblers who is used to providing advice and insights on each new online casino that is used by players in the country. He believes that the emphasis on offshore online providers of casino games will remain for the immediate future.

However, he also thinks that there is potential for the legal situation to change at some point once the Indian government becomes more aware of the valuation of this type of industry when the panel reports on its findings around horse racing, online gaming, and casinos.

The impact of the panel's findings will not start to be felt for several months yet and it's likely to be a lot longer until we get to see if the casino industry overall, including online casinos, changes as a result.