The Indian Supreme Court’s long hearing on whether a 28% Goods and Services Tax (GST) should be levied on the full face value of bets on online gaming websites is nearing its end, with a final decision expected in August 2025. The issue at the center of the dispute is whether real-money online games are considered “gambling” and subject to the highest 28% GST rate on the entire bet, or if tax is payable only on the commission retained by the operator. The divide between government tax authorities and gaming companies could redefine the industry’s business models.
| What it means | Potential impact | |
| Verdict timing | Supreme Court decision expected August 2025 | Immediate legal & commercial clarity (or continued uncertainty) |
| Core tax question | Whether 28% GST applies to full face value of bets or only operator commission | Dramatic change to tax base and operator margins |
| Industry stance | Gaming companies say their products are games of skill; tax should be on the service fee | Preserves existing business models if accepted |
| Tax authorities’ stance | Treats money-staked contests as gambling; seeking retroactive demands | Large recovery claims, cashflow stress, market consolidation risk |
| Impact | Live-casino suppliers (e.g., Live88) could face renegotiated terms or new models | Shift toward revenue-share, white-labels, and cost-cutting to preserve UX |
Why the Industry Is Watching
This Supreme Court case will decide two things: the immediate commercial viability of gaming companies and how digital games of skill are taxed in India going forward. Tax authorities are seeking large sums of money from companies, saying that any contest where money is wagered for a potential monetary reward is betting or gambling and is therefore subject to a 28% Goods and Services Tax (GST) on the entire sum wagered.
Conversely, most online gaming businesses contend that their products, including fantasy sports and some card games, are skill games, not gambling. They opine that GST is to be levied on the fee charged by the company and not on the entire sum of money deposited by users. The judgment matters significantly for operators like Live88 since a verdict in the government’s favor would wipe out profit margins and compel businesses to transfer the expense to customers, potentially reducing the overall market size.
- Tax authorities would like to collect significant sums of money from gaming companies. They argue that all games where money is staked for a potential return are gambling and should be taxed at 28% of the total amount bet.
- Gaming companies argue that some of their games, including fantasy sports, are skill games and not gambling. As per them, the 28% tax is to be levied only on their service charge and not on the whole amount of money that the users put in.
How Providers Fit In
Technology providers offering live casino software, stream management, and the live-dealer interfaces themselves are a constituency that is often forgotten in this discussion. If the Court holds up GST on the face value of bets, operators will seek to reduce costs or redesign fees, and those offering live casino modules (for instance, those offering live-roulette configurations, dealer video stacks, or RNG integrations) can expect to face renegotiations of agreements, altered commercial terms, or pressure to move to white-label or revenue-share models.
For instance, live casino games supplier Live88, which offers turnkey games and modules such as a dedicated live roulette software proposition, could become increasingly vital to operators seeking to maintain player experience while streamlining cost bases. Operators might favor partners that are able to provide low-latency, modular systems and commercially agile models that share risk in a more challenging tax landscape.
Business, Consumer, and Regulatory Fallout to Consider
If the Supreme Court rules for the government, expect at least three immediate ripples. First, operators may pass material parts of the tax to consumers, increasing effective costs per game and potentially suppressing player activity. Second, smaller and mid-tier platforms with thin margins may exit, be acquired, or migrate to offshore models that create further regulatory headaches. Third, regulators and states may accelerate complementary rules, from age/identity verification to limits on promotional practices.
Conversely, if the Court decides that most popular formats are games of skill and the GST base is tightened, the industry can look forward to new investment, improved pricing, and reduced litigation risk.
FAQ
Q: If the Court decides in favor of the government, who pays, operators or players?
A: Practically, operators may pass a significant portion of the tax burden to players via higher entry fees or lower payout ratios, unless operators absorb the cost, which would erode margins and likely lead to market consolidation.
Q: Are all online games impacted equally?
A: No, the legal distinction between games of chance and games of skill is critical. Games which can be convincingly shown to be skill can avoid the 28% gambling GST; numerous court cases hinge on this old doctrine.
Q: How should providers react now?
A: Providers need to revise commercial models to encompass flexible pricing (e.g., revenue share), enhance contract protections, and provide compliance tooling (auditable logs, KYC/AGE checks). Providers that can help operators reduce compliance friction quickly will be sought after.