India Taxes Game Developers - How Much Will They Lose?
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Earlier this month, the government of India announced it would soon impose a 28% tax on all betting games. This sent shockwaves through India's booming gaming industry and tanked a few stocks.
The first two thoughts that come to mind are why now and how much money are we talking about?
So I rounded up the top 100 casino games in the App Store and on Google Play and looked at their revenue estimates in India for June.
The first question of why is fairly easy to answer - there's a decent chunk of money there. And this is only mobile, which is just a fraction of the betting games the new tax is targeting.
According to our App Intelligence, the top 100 casino games on the App Store and Google Play in India saw $197M of net revenue in June. This is net revenue which means what the developers get to keep after giving Apple and Google their fees, and this revenue is only from India.
India was already taxing game companies, but only on what they keep and not what they pay back to players. As part of this new tax, all revenue (aka face value) is being taxed.
At those numbers, a 28% tax equals about $55M of revenue for the government. Every month.
Looking at all of 2023, these numbers are pretty stable. January was a bit higher, February lower, and the rest somewhere in between. Stability is a great time to jump on an opportunity, but it does come with a potential for danger.
India isn't the first country to tax betting games on face value. Poland and Portugal do that and even though the amount is much lower, the two are struggling to keep gaming companies in the country, and those that stay don't do so legally.
For a moment, several news outlets believed the tax was on all games, a fact that was later clarified by the government. But, if that were the case, India's government would be about ~$300M richer every month.
I hope that doesn't happen in the future.
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All figures included in this report are estimated. Unless specified otherwise, estimated revenue is always net, meaning it's the amount the developer earned after Apple and Google took their fee.