The GST Council in India recently voted to levy a 28% GST on online cricket betting sites, as well as other types of internet gambling, casinos, and horse racing, beginning October 1, 2023. This move has caused a lot of controversy and discussion, both among the online cricket betting community and the broader public, concerning the impact and ramifications of this increased tax rate on the sector and society. In this article, we will look at the new 28% GST, how it works, why it is a bad idea, and how it may attract more fraudsters in the Indian online cricket betting market.
The New 28% GST: What is It and How It Works?
To illustrate how the new 28% GST works, consider a cricket match between India and Australia and say that the online cricket betting platform charges a 10% fee on each wager. Assume that one bettor wagers ₹100 on India to win the match, while another wager ₹100 on Australia to win the match. The online cricket betting platform will receive ₹200 from both bettors and will pay the government 28% GST on the whole face value of ₹200. The online cricket betting provider will subtract ₹56 as commission and keep the remaining ₹144 as the net amount.
Suppose that India wins the match, and the bettor who bets on India wins ₹152 as the payout. The bettor who bet on India will also have to pay ₹28 GST on the full face value of ₹100, to the government. The bettor who bet on India will thus receive ₹124 as the net amount, after paying the GST and the commission. The bettor who bet on Australia will lose ₹100, and will also have to pay ₹28 GST on the full face value of ₹100, to the government. The bettor who bet on Australia will thus lose ₹128 as the net amount, after paying the GST and the commission.
Why The 28% GST is Not a Good Idea
The new 28% GST is not a good idea, for several reasons, as it will have adverse effects, on the online cricket betting industry, as well as the society, in India. Some of the reasons are:
The implementation of the 28% GST would raise costs and reduce earnings for both online cricket betting companies and bettors. Because of the lower profitability and increased expenditures, this shift is likely to dissuade many people from participating in online cricket betting. As a result, the income and growth of the online cricket betting sector, as well as government tax revenues, are likely to drop as fewer individuals bet and pay taxes on these platforms.
The recently enforced 28% GST is anticipated to give rise to an underground and illegal online cricket betting network in India. Individuals from reputable online betting looking to avoid the high tax rate may use unregulated and unapproved platforms operating outside of India or inside the black market, which are free from GST payments. This move raises the stakes for both operators and bettors, exposing them to the possibility of fraud, deceit, money laundering, and cybercrime enabled by these illegal online cricket betting sites.
How The 28% GST Could Invite More Scammers
- The new 28% GST may attract more scammers in India's online cricket betting industry, as it will create and provide an opportunity and incentive for many unscrupulous and dishonest individuals and entities to exploit and manipulate the online cricket betting industry, as well as Indian betting community as a whole.
- The implementation of the new 28% GST might open the door to more scammers who will pose as reputable online cricket betting providers promising cheaper or no GST, as well as larger or guaranteed profits. This is aimed specifically at unhappy bettors and punters who are fed up with the currently established sites, which charge exorbitant GST, and offer unclear returns. These fraudsters want to lure unwary consumers to their fraudulent online cricket betting platforms by using techniques such as phishing, hacking, and identity theft to defraud them of their money and personal information.
Conclusion
The decision to impose a 28% GST on online cricket betting, as well as other internet gaming, casinos, and horse racing, is viewed negatively. This regulation is viewed as a problem rather than a solution, and it is predicted to harm both the online cricket betting sector and Indian society. There is a need for the GST Council and the government to reconsider and revise this judgment to protect the best interests and well-being of the online cricket betting business and the greater Indian community.