The Central Government told the Supreme Court that in the context of Goods and Services Tax (GST), the distinction between games of skill and games of chance doesn’t matter. According to the Centre, any act of betting whether it’s skill based or chance based is gambling and hence taxable under GST.
This was during the ongoing hearing on taxation and legal classification of fantasy sports and other online gaming platforms. The Centre said that any wager placed on the outcome of an event or game, whether skill based or chance driven, is gambling for the purpose of taxation.
The government also said that some Indian states like Nagaland have laws that provide legal safeguards to games of skill. But the Centre said even within those legal frameworks, betting on the outcome of those games should be treated as gambling. The Centre said the legal distinction between skill and chance doesn’t matter if money is wagered on a result that the participant can’t control directly.
If the Supreme Court agrees with the Centre, all forms of gambling, including fantasy sports, could be taxed at 28% GST, same as the highest slab.
To support its argument, the government drew parallels from international sports. It gave the example of betting on how many goals a football star like Lionel Messi would score in a match. Despite Messi being a great player, the outcome is uncertain and beyond the bettor’s control. Similarly in fantasy sports, users create teams with real world players and earn points based on their performance. But they have no control over how those players perform in actual matches.
The Centre also raised concerns about the addictive nature of these platforms, saying many of them offer promotional rewards and incentives that can encourage compulsive behaviour among users, making them vulnerable to gambling related harms.
The case is currently before the Supreme Court which is hearing broader legal and constitutional questions on classification and taxation of online gaming platforms. The hearing is scheduled for Tuesday, May 5.
Share
40 views
Analysis
Blog
Business
Crime
Finance
M&A
Regulation
Reports
Network
About us
Privacy and policy
T&C