Gaming industry’s worst fears are becoming a reality ahead of the GST Council’s scheduled meeting on August 2 to discuss taxing online gaming. Offshore betting companies, known for enticing players with easy money-making options, have added a new element to their bait. “No tax’.
Amidst the GST chaos, platforms like 1xBet, WinBuzz, Fairplay, and others are aiming to rapidly expand their userbase. Leveraging their active presence and partnerships with actors and influencers on social media, they have adopted a unique approach. Now, they are collaborating with micro-influencers (10,000–100,000 followers) and nano-influencers (100 to 10,000 followers) to distribute codes that promise extravagant perks such as ‘No TDS’, ‘No GST’, and even ‘Lossback Bonus’.
As per experts the influencers are charging anywhere between Rs1000 and Rs1 lakh for these quick videos promoting features such as ’24X7 winning withdrawal, no GST, and referral code bonuses’.
“The day the new tax rate was proposed, we knew it would push users towards illegitimate betting and gambling operators that don’t follow the laws of the land. We didn’t expect the brainwash around evading tax would start so soon. We can only hope that the outcomes of the August 2 meeting of the GST council take these factors into consideration,” said the owner of an iGaming company.
In a cost sensitive market like India, bringing down expenses is always a lucrative option.
“With the Government levying almost prohibitive taxes on the online gaming platforms and the prize pool being taxed repeatedly – the customers will gravitate to these offshore platforms where in the absence of GST or TDS liability – the cost of playing games would be much lower,” said Avik Sarkar, professor at the Indian School of Business
Another expert close to developments said that the loss of money for users and the loss of taxes for the government are not the only two concerns when it comes to offshore betting. “There is no data protection guarantee, and we have no idea what these companies do with all the player data they collect in India,” they said.
Despite being online gambling companies based outside India and lacking verified social media accounts, they have always successfully engaged top celebrities like Ranbir Kapoor, Badshah, Suniel Shetty, Nawazuddin Siddiqui, and more. These companies cleverly present themselves as content platforms, using brand ads that feature QR codes. Scanning the QR code redirects users to a WhatsApp business account, providing access to sites with usernames and passwords for placing bets.
The Ministry of Information & Broadcasting (MIB) has been consistently issuing advisories to media platforms to halt advertising for these companies. While major TV networks have withdrawn their ad deals with them, social media remains unaffected.
While, the Indian Premier League has always been a lucrative opportunity for these betting sites, influencers are now promoting the India West Indies series with content that promises “No GST” benefits.
Industry estimates suggest that these offshore companies spent approximately Rs 2,000 crore on marketing activities across various platforms during the 16th Indian Premier League. However, this amount is a rough estimate and could be significantly higher if all the undisclosed influencer promotions from the unorganized sector are considered.
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