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India’s online gaming industry is once again under scrutiny.
What’s going on: the Supreme Court has backed the government’s move to levy 28% GST retrospectively on online gaming companies, clearing the way for tax demands of more than ₹1 lakh crore.
The court said games involving money stakes can be treated like betting or gambling under GST rules.
This kinda ends a long-running fight between gaming companies and tax authorities over how GST should be calculated on real-money games.
Companies like Dream11, Games24x7, Head Digital Works and Gameskraft had argued that GST should apply only on their platform fee or commission, not on the full amount deposited by users.
But the government’s stand was simple, once users put money on an uncertain outcome, the entire amount should be taxed at 28%.
Background: in August 2025, the government introduced the Promotion and Regulation of Online Gaming Act, which banned online money games where users deposit money with the hope of winning more.
Ironically, this crackdown comes at a time when India’s gaming market is projected to grow rapidly over the next few years.
However, that law triggered a sharp fall in India’s $3.5 billion real-money gaming industry, forcing companies to cut costs, lay off thousands of employees and look for new business models.
The rules came into effect from May 1, 2026, leaving gaming platforms with very little room to operate as before.
According to Moneycontrol, the industry is now weighing its next steps, from filing a review petition and seeking a larger bench hearing to approaching the GST Council or negotiating a settlement with the government.
