Since they will probably be the next wave of application developers to be hit with the 15–30% tax starting in June of this year, online real-money gaming (RMG) companies are keeping a close eye on the ongoing struggle between Google and startups over service costs.
These businesses claim that having to pay a 28% goods and services tax on top of a 30% service charge will be unsustainable for any kind of business and will result in a double whammy. They are also thinking of a number of ways to lessen the effects.
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A few RMG apps were permitted to be listed on the Play Store for free by Google as part of a pilot scheme. Following a two-year pilot programme, it was announced that all RMG apps would be able to access the marketplace and that a commission would be assessed starting in June. Given the size and access that the Android maker provides to the 568 million mobile gamers in India, delisting from the Play Store to avoid paying the fee won’t be an easy choice for the apps, according to industry executives.
“It would be especially difficult to pay additional service fees as they are trying to get their unit economics right, for an industry that is already absorbing the highest taxes in the world,” an executive from a gaming business told ET. According to this executive, betting applications like Skybet and Bet365 in the UK and Draftkings and FanDuel in the US are still available on the Google Play Store without charging a service charge. “Is it then reasonable to request that we attempt to extract from a pressured sunrise sector once more?” he questioned.
“Countries with a more secure real-money gambling environment have long benefited from free product distribution on the Play Store. He questioned, “Shouldn’t Google support instead of playing the role of an adversary? Indian RMG is just trying to find its feet.” In India, Google has started a test programme with daily fantasy sports and rummy apps. Google announced in January that it would “evolve” its service charge model and permit more RMG operators (presumably poker platforms) to list their apps on the Play Store starting on June 30.
Google’s decision to include more skill gaming apps on its platform will help new developers compete with the incumbents by significantly lowering user acquisition expenses, according to the All India Gaming Federation, the industry-representing group.
In India, Google has started a test programme with daily fantasy sports and rummy apps. Google announced in January that it would “evolve” its service charge model and permit more RMG operators (presumably poker platforms) to list their apps on the Play Store starting on June 30.
This implies that businesses may be subject to a 15–30% revenue tax.
RMG apps have greatly expanded since being listed on the Play Store; some of the best ones, like Dream11 Fantasy, have been downloaded 50 million times. Some apps have received 10 million downloads apiece, such as Octro Inc.’s Teen Patti and Games 24X7’s Rummy Circle and My11 Circle. Five million downloads were made of Rummy Culture (by Gameskraft), MPL Rummy (by MPL), and A23 Rummy (by Head Digital Works). Up to the deadline, Dream11, the MPL, Games24X7, and Google India have not responded to ET’s inquiries.
Google’s decision to include more skill gaming apps on its platform will help new developers compete with the incumbents by significantly lowering user acquisition expenses, according to the All India Gaming Federation, the industry-representing group. Roland Landers, the chief executive of the federation, stated, “We believe that Google should employ supportive policies around fee structures as well as the onboarding process, making the process equitable while resulting in greater competition and consumer choice.”
Some, meanwhile, think this might even lead to big platforms operating outside of Google’s Play Store. “Yes, the reach and scale do add up, but this is a sector that has been operating independently for more than a decade since it was prohibited on the Play Store,” stated another official.
The source continued, “But now that there is a service charge, the distribution that wasn’t through the Play Store may make more sense from a unit economics standpoint, forcing operators to go back and reallocate funds intended for user acquisition to other channels.”
This development occurs at a time when Indian RMG companies are battling an online gaming blanket tax of 28%. Previously, platform fees, sometimes referred to as gross gaming revenue (GGR), were subject to an 18% GST for skill gaming platforms. The new regulations do not distinguish between games of skill and games of chance as of October 1.
Google started a test initiative in 2022 that allowed customers in India to download rummy and daily fantasy sports (DFS) apps. The last day of this curriculum was September 28, 2023. Prior to the new policy going into effect on June 30, 2024, it offered an extension for current pilot apps to stay on Google Play until January 15, 2024.
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