Spartan Poker, the popular online poker platform in India, has fallen victim to the government’s imposition of a 28 percent Goods and Services Tax (GST) on online gaming.
The platform has reportedly been forced to lay off 125 employees, which accounts for 40 percent of its total workforce, in response to the financial strain caused by the increased tax burden.
Spartan Poker, co-founded by Amin Rozani, Sameer Rattonsey, and Peter Abraham, has been providing users with a platform to participate in online poker tournaments. However, the recent implementation of the steep GST has led to significant financial challenges for the company.
In a similar vein, last week, Hike, a startup founded by Kavin Bharti Mittal, also faced the impact of the gaming tax hike. Hike’s gaming arm, Rush Gaming, is recognized for its offerings in the gaming sector. Mittal expressed his concerns, stating that the substantial 400 percent increase in GST feels like a “bazooka pointed” at the industry.
Hike is known for operating Rush Gaming Universe (RGU), a blockchain-based platform for real money gaming. The company had to lay off around 55 employees due to the adverse effects of the increased GST.
Another casualty of the higher tax rate is Mobile Premier League (MPL), an online gaming platform that recently cut its workforce by nearly 50 percent, affecting around 350 jobs. Despite the industry’s appeals, the 51st GST Council meeting remained firm on taxing online gaming at 28 percent on the gross value collected.
Critics within the gaming industry have argued that taxing GST on player deposits rather than on the technology platform’s commission will render the economics of the industry unviable. This, in turn, could potentially wipe out up to 80 percent of the sector, further emphasizing the challenges posed by the current tax structure.
As online gaming platforms struggle with the implications of the increased GST, industry stakeholders and experts continue to urge for a reconsideration of the taxation approach to ensure the viability and sustainability of the sector.