Note floated to seek distinction between online game of skill, game of chance for FDI

The Department for Promotion of Industry and Internal Trade (DPIIT) has circulated a note seeking views of different ministries on distinguishing between an online 'game of skill' and a 'game of chance' for Foreign Direct Investment (FDI), a senior official said. The official said that a clear distinction between the two is necessary to seek foreign investments as online game of skill has huge potential.

In his address during the 78th Independence Day celebrations this year, Prime Minister Narendra Modi called upon Indian professionals to lead the global gaming market and help establish the country as a global leader in the industry.

He had emphasised the need for Indian talent to dominate, not just in gaming but in game production as well by leveraging the country's rich cultural heritage.

"A concept note was circulated for inter-ministerial discussions to distinguish between the two for the purpose of FDI. We need to see how in online gaming, we can make distinction between 'games of skill' and 'games of chance' for the purpose of FDI," the official, who does not wish to be named, said.

Certain quarters raise objections as they relate online gaming with gambling and betting. There are also issues that who would be the final authority to define these things."We need an independent body to assess that," the official said, adding, "in our interpretation, there is no restriction when it comes to game of skill but the problem is who will define game of skill."

Online gaming as an industry is evolving, and has expanded across horizons. India is the fastest growing mobile gaming market and the annual revenue of the overall Indian gaming industry is expected to almost double to $6 billion by 2028 from $3.1 billion in 2023, a joint report by Interactive Entertainment and Innovation Council and online gaming firm Winzo has said.

According to that report, the Indian gaming industry comprises over 1,400 gaming companies, including 500 gaming studios. The annual revenue for gaming is projected to reach $6 billion by 2028.

The GST Council last year decided that 28% GST (Goods and Services Tax) will be levied at face value of entry level bets placed on gaming platforms and casinos.