Editor
On Monday, May 5th, the Supreme Court of India debated whether taxes should be differentiated within the country and whether games of skill vs. chance should prevail.
The debate centered explicitly around rummy, chess, and bridge, which are currently classified as games of skill. While this specific debate in India revolved around these games, it mirrors debates elsewhere that have classified another game, poker, as a mind sport.
In this case, the question became whether these games could evolve into games of chance if wagers were placed on them. If they were to become games of chance, the earnings would be subject to the Indian Goods and Services Tax (GST) regime.
Solicitor General for the government N. Venkataraman stated:
“Then it will become gambling, despite being a game of skill… Betting on a game of skill is statutorily considered gambling.”
His main argument was that betting on any game is gambling, regardless of the skill required in any game, and therefore should be subject to taxes.
In an attempt to get out of being subject to the GST, the pushback came from the online gambling companies, who argued that these games have consistently been classified as skill-based sports. They believe they should only be subject to the GST on fees and commissions.
In 2023, the GST council recommended that online gaming, along with casinos and horse racing, must be taxed at a uniform rate. It decided against declaring any distinction between games of skill and games of chance.
This all comes despite a history of online gambling and poker, with PokerStars entering the India market in 2018. The Government of India remains fairly strict when it comes to gambling regulation. Over 1,400 gaming sites have been banned within the country of 1.4 billion people after various complaints about each site were filed and evaluated.
