Betting Platform Super Group Leaves India Following Massive Tax Hike

Posted on: October 3, 2023, 06:49h. 

Last updated on: October 4, 2023, 01:36h.

India’s decision to tax iGaming operators an unprecedented 28% Goods and Service Tax (GST) has already claimed its first casualty, just days after taking effect. In a not-so-surprising turn of events, global sports betting operator Super Group has announced its immediate withdrawal from the Indian market.

Lucas Paquetá of West Ham United wearing a jersey showing Betway as a sponsor
Lucas Paquetá of West Ham United wearing a jersey showing Betway as a sponsor. Betway owner Super Group is exiting India after implementing a 28% GST on gaming companies. (Image: Getty Images)

Super Group, the parent company of popular brands such as Betway, Spin, and Hyperino, had been a significant player in India’s burgeoning online gambling market. However, the sudden increase in taxation has prompted the operator to reassess its viability in the country.

The Indian government’s decision to impose a 28% tax on iGaming revenue marks a significant leap from the previous rate of 18%. This drastic change has sent shockwaves through the industry, with Super Group being the first major player to pull out.

There was a time that it seemed like cooler heads would prevail in India, which would have blocked the new tax rate. However, it now seems that policymakers haven’t learned from previous attempts to overtax online gaming segments elsewhere.

More Exists Expected

Betway, one of Super Group’s flagship brands, had gained substantial popularity in India, offering a diverse range of sports betting options. However, Betway was already on the way out of the country. This past February, it, along with Parimatch and others, had their online gaming apps banned by the government.

Super Group’s exit from India is expected to be the first of several, as industry experts predict a domino effect among iGaming operators grappling with the increased tax burden. The higher taxation rate not only affects the profitability of these operators but also raises concerns about the sustainability of their businesses in the Indian market.

The sudden and substantial tax hike is seen by many as a deterrent to foreign investment in the Indian iGaming sector. Several operators are likely to reassess their operations in the country, considering the financial implications of the new tax regime.

Industry insiders have expressed concerns that this move could stifle the growth of the online gambling sector in India, a market that has shown immense potential in recent years. The decision to raise taxes could drive away not only international operators like Super Group but also hinder the entry of new players into the market.

The idea behind the increased GST, according to the government, is to better control the gambling industry. It will likely miss the mark, as history has shown – as in the case of the Philippine Offshore Gaming Operator segment – that overtaxation often fuels an increase in illegal gaming activity.

Departure to Impact Economy

Super Group’s departure is expected to impact not only its employees in India but also local businesses and affiliates associated with the brand. The company had been actively involved in sponsorships and partnerships within the Indian sports and entertainment industry, especially the eSports segment, contributing to the overall economic ecosystem.

As news of Super Group’s exit spreads, stakeholders in the iGaming industry are closely monitoring the government’s response and considering their own strategies. The Federation of Indian Chambers of Commerce and Industry (FICCI) has already received requests for urgent discussions with the government to reconsider the taxation policy.

The All India Gaming Federation has spoken out against the move, as well. It has said the GST tax rate is “unconstitutional,” and said that it could decimate India’s gaming industry completely.

The fate of the iGaming industry in India now hangs in the balance as operators assess their ability to navigate the increased tax landscape. The government’s decision to raise the tax rate has undoubtedly set the stage for a critical juncture in the future of online gambling in the country.