BENGALURU: Following the GST Council’s decision to levy a 28% GST on online gaming revenue, five gaming start-ups have had to either lay off or shut operations. Real money gaming app Fantok is the latest one to halt operations.
The company said, “We have made the difficult decision to temporarily suspend operations at Fantok. This pause will allow us the time needed to explore a pivot that aligns with both the evolving regulatory landscape and our mission to deliver meaningful experiences.”
"We are proud of the accomplishments we achieved during this phase, from reaching 15k+ downloads in just 3 months to fostering a community of over 130 creators who brought their innovative games to our platform,” it added.
The evolving landscape of regulatory measures in the real money gaming sector in India, as announced earlier this year, has presented complex legal hurdles that have forced us to reevaluate our direction, Fantok added. Apart from Fantok, gaming start-up Quizy temporarily shut its operations.
"The introduction of a 28% GST rate on entry fees further compounded our woes and murdered the industry. We have always strived to strike a balance between generating revenue for the government and providing an enjoyable experience for our players. However, an abrupt increase in the GST rate would have placed an undue tax burden on the gaming industry, affecting not just our profitability but also the overall gaming ecosystem,” Sachin Yadav, Quizy co-founder, said in a LinkedIn post.
Hike’s Rush Gaming Universe (RGU) reduced its workforce by 22% or 55 people and last week, online poker platform Spartan Poker fired 40% of its workforce.