India's Goods and Services Tax Council decided at its 50th meeting that online gaming platforms, including Dream11, would be taxed at 28% on the full face value of placed bets, with no distinction between games of skill and games of chance1.
The change replaced a split regime. Skill games had attracted GST at 18%, while chance games were taxed at 28% on the commission1. Under the new rules, tax applies to the entry bet itself rather than to the operator's revenue. In an example given by The Hindu, an entry fee of ₹100 with gross gaming revenue of ₹20 previously produced ₹3.6 in tax at 18%; the new provision taxes the ₹100 entry bet at 28%, producing ₹281. The report said this leaves less for platform fees and reduces the prize pool1.
Finance Minister Nirmala Sitharaman said the intention was not to harm the industry, and raised a moral question about whether gaming, including casinos and horse racing, should receive greater encouragement than essential goods. She also cited simplifying the tax mechanism and promoting transparency1.
"The GST Council's new laws do not differentiate between skill and chance and levy 28% GST on both!"
The dispute over classification has continued in court. On September 12, tax authorities issued notices giving Dream11 30 days to explain why it should not pay a shortfall of 2.1 billion rupees ($26.07 million) for 2017-18 and 10 billion rupees ($120.85 million) for 2018-19, plus interest and penalties1. Dream11 filed a lawsuit in the High Court in Mumbai challenging the demands1. The company argues it falls in the "games of skill" category, which it says merits a lower rate applied to its earnings, particularly platform fees, rather than the entire prize pool1. Authorities have demanded approximately $150 million for alleged underpayment in 2017-2019 and are investigating a further four years to March 2023, according to the company's court filing1.
| Period | Amount demanded |
|---|---|
| 2017-18 | 2.1 billion rupees ($26.07 million) |
| 2018-19 | 10 billion rupees ($120.85 million) |
| 2017-2019 total | approximately $150 million |
What it means for players
The tax is levied on the full face value of a bet, not on the platform's cut, so the cost is built into the entry fee a player pays rather than charged separately at withdrawal. The report states the change reduces the funds available for platform fees and the prize pool, which points to smaller prizes or higher entry fees on affected platforms1. Because the rules no longer separate skill from chance, contests that players may have treated as skill games now sit under the same 28% rate as chance games1. The tax treatment of winnings in a player's hands is not addressed in the report. For background on how operator taxes reach players, see Betting Duty, GST and Casino Tax: How Operator Taxes Reach Players and Tax on Gambling Winnings in Asia. For the wider legal position, see Can I Gamble in India? and What India's Online Gaming Ban Means for Players.
What happens next
Dream11's lawsuit in the Mumbai High Court is pending, and the outcome has not been reported1. The investigation into the company's tax payments for the four years to March 2023 is also ongoing1.
