Indian gaming companies want to distance themselves from fantasy sports: Report
-, Jul 10, 2024, India Blooms News Service17
New Delhi/IBNS: The real-money gaming firms and fantasy sports startups have marketed themselves as video gaming companies for over a decade, but a coalition of more than 70 Indian video game firms is urging the government to create a clear distinction between their industries as these businesses face rising regulatory scrutiny, reports TechCrunch.
The coalition of Indian video gaming companies, in a letter to Prime Minister Narendra Modi and the Union Ministry of Information and Broadcasting, have asked the government to abandon the umbrella term online games in favour of distinct categories: video games and real money games as part of a broader request to boost Indias digital entertainment sector, as reported by TechCrunch.
According to reports, this push for clear definitions in the industry comes in the wake of recent tax amendments that moved real money games to a 28 percent bracket while video games remained at 18 percent, and the video gaming companies argued that the lack of clear differentiation has led to unintended consequences for video game firms.
TechCrunch claims in its report that it has accessed and reviewed the gaming companies coalitions letter to the PM where it is mentioned that companies making video games were subject to multiple show cause notices and tax raids, and banks and payment gateway companies have been denying services as well.
As per reports, GMonks, NewGen, Lila Games, Dot9 Games, and Esports Federation of India (ESFI) are among the signatories in the letter.
The TechCrunch report added that in some cases, local police have carried out raids at video game parlors, mistaking them for gambling establishments, due to which video gaming companies are facing trouble while dealing with overseas investors.
Another reason behind the call for industry differentiation is fantasy sports startups increasingly overshadow the traditional video gaming sector, and this dominance has resulted in lawmakers largely overlooking the authentic concerns and policy proposals of legitimate video game companies, further emphasizing the need for distinction between the two industries, TechCrunch reported.
Besides calling for clear, distinct definitions in Indian policy frameworks to address these issues, the consortium is also requesting that the Ministry of Information and Broadcasting restrict media outlets from using images of video games when reporting on real money games or gambling, aiming to curb public misconceptions, as reported by TechCrunch.
According to reports, the group of video gaming companies have defined video games as digital entertainment products played purely for leisure or learning, without monetary staking, while real money games involve users staking money to enter contests with the potential to win or lose real currency.
The coalition of video game firms has also asked the government to reduce the GST on video games from 18 percent to 12 percent and advocated for corporate tax holidays to attract investments and support the industrys sustainability, reports TechCrunch.