On July 12, 2023, Nazara Technologies shares, Delta Corp, Zensar Technologies, and OnMobile Global tumbled 1-20% after the GST Council declared that online gaming, casinos, and horse racing would be taxed at 28%.

Delta Corp shares a record 20% lower circuit limit at Rs 197.45. Nazara Technologies shares slumped 6%, while OnMobile Global fell 5%. Zensar Technologies shares tumbled about 1% but recovered soon after.

The Group of Ministers decided to levy a 28% Goods and Services Tax (GST) on the total value of online gaming, horse racing and casinos with no difference between games of skill and chance in the 50th GST Council Meeting, Finance Minister Nirmala Sitharaman said.

However, the effective date for the 28% GST levy on online gaming will roll out after modifications to the GST law.
Online betting and gambling now attract 28% GST, regardless of whether it is a game of skill or chance. Other games attract an 18% levy on gross gaming revenue (GGR).

This comes at a time when online gaming businesses were recovering with the formation of a Self-Regulatory Body (SRB) and lifting of the ban on Battlegrounds Mobile India.

Nazara Technologies simplified that once this tax is executed, it will apply only to its business’s skill-based real money gaming section. “The contribution of this section to our overall combined revenues for the financial year FY23 was 5.2%,” the company said in a regulatory filing.

For Delta Corp, 80% of the gross income came from gaming operations in FY23 and about 15% from online skill gaming operations.

In the case of Zensar Technologies, the IT firm has established a keen Game Testing Centre of Excellence to support gaming companies in accomplishing their testing and development goals with improved efficiency and speed.

Meanwhile, OnMobile Global, an Indian telecommunications firm presenting a range of products with games, videos, tones, and contests, has only one operating part.