Indian Video Games Industry Rallies Together to Differentiate Between Video Games and RMG

Over 45 companies from the Indian video games industry including Penta Esports, SuperGaming Hypernova Interactive and others have rallied together to request the Government of India to make a distinction between video games, and Real Money Gaming (RMG) and Fantasy Sports.

According to the industry members, the recent decision to apply 28 percent Goods and Services Tax (GST) on "Online Games" by the Indian Government has sparked extensive discussions and triggered targeted PR campaigns that associate Real Money Games (RMG) and Fantasy Sports with Video Games and Esports, both in front of domestic and international media as well as gamers.

Here's what the Indian video games industry wants

The members of the industry have written to the Prime Minister’s Office (PMO), Ministry of Electronics and Information Technology (MeitY) and Information and Broadcasting Ministry (I&B) asking for clearer distinction between “video games”, and “real money gambling/fantasy esports.” RMG/Fantasy should be called ‘iGaming’ the way it is defined in the rest of the world. 

According to the industry members, “Online Games" is too broad of a term and carries a different meaning in Indian jurisprudence compared to the global understanding, leading to confusion among gamers, international investors, game publishers, and media during the GST row. This confusion has played a considerable part in fuelling the recent controversy on 28 percent GST.

What is being called “Online Games/Online Gaming” in India is known as ‘iGaming’ internationally. It's also pertinent to highlight that the global games market revenue of $184 Billion USD does not include revenue from RMGs and Fantasy Sports. 

Roby John, Co-founder and CEO of SuperGaming said in a press release, “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” 

Anurag Khurana, CEO and founder of Penta Esports, said “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 that involve staking/wagering of money. Esports inherently does not involve any form of the staking/wagering elements and hence has no impact.” 

The 45 companies have issued a joint statement that explains the potential problems, the homogenization of the term “online gaming”, poses to the industry. They said that it can lead to two problems which are: 

“Unfair Social Stigma: The negative sentiments and social stigma towards games involving monetary wagering are unfairly linked to video games in Indian society, leading to misconceptions about our industry’s products and services. 

Clouded Investor Perception: International game corporations, publishers and investors are under the impression that the Indian regulatory system does not differentiate between Video Games and RMG/Fantasy Sports (iGaming) and applies blanket regulations to both industries. This has resulted in hesitation to invest in Indian video game companies and discouraged potential investments, co-productions, and strategic partnerships.” 

The industry members have requested an audience with authorities so their concerns can be addressed.