Online gaming, horse racing and casinos to be levied with 28% tax as decided in the 51st GST council meeting.

The amendment would only be applicable to games where players expect to receive monetary gains like rummy or poker.

The hike is not applicable on E-Sports such as FIFA or other games on Xbox and Playstation.

MPL, a real money gaming company, has decided to lay off 350 employees which constitute of about 50% of their staff in India.

“The new rules will increase our tax burden by as much as 350-400 per cent. As a business, one can prepare for a 50 per cent or even a 100 per cent increase, but adjusting to a sudden increase of this magnitude means we need to make some very tough decisions”, said Srinivas, founder of MPL, in an email.

Quizzy a gaming startup announced it’s closure following the announcement.

“The introduction of a 28% GST rate on entry fees further compounded our woes and murdered the industry finally.” said Sachin Yadav, founder of Quizzy, in his Linkedin post.

“The gaming industry holds vast potential to be a catalyst for positive change and employment opportunities, and it deserves a nurturing environment that allows it to flourish.” he added.

The All India Gaming Federation has called the move “unconstitutional, irrational and egregious” in a post on twitter.

The amendment is likely to be considered in the ongoing monsoon parliament session, however proposed draft bill is yet to be listed.