10.09.2022: UP joins lottery lobby as West Bengal pushes for 28% GST on online gaming

West Bengal, a state with a flourishing lottery business, has been joined by Uttar Pradesh, where there is a lottery ban, to push for a 28 per cent GST for online skill gaming.

This move of West Bengal could be prompted by the lottery lobby, according to a report published by industry publication G2G.

An overwhelming majority of the group of ministers (GoM) on the GST matter felt that online gaming, horse racing and casinos are three different sectors. Therefore, they should all be treated separately.

Striking a contrarian note, the state government of West Bengal has called for a uniform GST rate of 28 per cent on online gaming, casinos and horse racing without making a distinction between games of skill and games of chance.

This stand of the West Bengal government echoes that of the All India Federation of Lottery Trade and Allied Industries (AIFLTAI), an umbrella organisation of lottery distributors, stockists and agents.

In December 2021, AIFLTAI had writen to the GST GoM requesting for a uniform GST rate for lottery and gaming.

This stand is supported by Uttar Pradesh, a state that has banned lottery, in a highly unusual move. This has left observers flummoxed as both states are on different ends of the political spectrum and Uttar Pradesh is known for its very strong stand against lottery and gambling.

In fact in 2020, Chief Minister Yogi Adityanath told the UP assembly that setting up casinos in the state would lead to degradation of moral values and create a law and order crisis.

Meanwhile, experts say that the online gaming industry, that is part of the India's showcase startup sector, will take a major hit if they are treated on par with the casino and lottery sector.

A report by BCG and Sequoia India said India's online gaming industry is expected to grow to USD5 billion by 2025. Prime Minister Narendra Modi has talked about the huge potential of the Indian gaming sector in making a mark globally.

All of this, industry experts say, could go on a downward spiral, if online gaming sector is equated with the casino and lottery sector.

Source: Business Standard 

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