NEW DELHI:  West Bengal, a state with a prosperous lottery business, has been joined by Uttar Pradesh, where there is a lottery ban, to push for a 28 percent GST for online skill gaming.

According to a report published by industry publication G2G, the lottery lobby may have inspired West Bengal to make this decision. Online gaming, horse racing, and casinos were viewed as three distinct industries by a resounding majority of the group of ministers (GoM) who were involved in the GST issue. Therefore, they should all be treated separately.

The state government of West Bengal has called for a uniform GST rate of 28 percent on online gaming, casinos and horse racing without making a distinction between games of skill and games of chance.

The All India Federation of Lottery Trade and Allied Industries (AIFLTAI), an umbrella organisation representing lottery distributors, stockists, and agents, has taken a position that is similar to that of the West Bengal government.

AIFLTAI wrote to the GST GoM in December 2021 to request a consistent GST rate for gaming and lotteries.
This stand is supported by Uttar Pradesh, a state that has banned lottery, in a highly unusual move. Given that both states are at opposite ends of the political spectrum and that Uttar Pradesh is known for taking a very hard stance against lotteries and gambling, this has onlookers perplexed.

Uttar Pradesh Chief Minister Yogi Adityanath warned the UP assembly in 2020 that the establishment of casinos in the state will degrade moral standards and result in a law and order catastrophe.

Meanwhile, experts say, the online gambling industry, which is a prominent startup sector in India, will suffer significantly if it is handled on a par with the casino and lottery industries.

According to a survey by BCG and Sequoia India, the online gaming market in India is predicted to reach $5 billion by 2025. The vast potential for the Indian gaming industry to become well-known internationally has been highlighted by Prime Minister Narendra Modi.

If the Online gaming market is compared to the casino and lottery industries, experts in the field warn that everything could spiral out of control.

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