MC Tech3 | Gaming studios distance themselves from real-money gaming; Govt cracks down on illegal maps; and more

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One important thing: Qatar Investment Authority is reportedly considering a $1 billion stake in Reliance Retail. The deal is pegged at $100 billion valuation, as per Financial Times.

In today’s newsletter:

• Gaming studios distance themselves from real-money gaming
• Govt cracks down on illegal maps on apps
• Toughest quarter in 5 years: TechM CEO Gurnani

Gaming studios distance themselves from real money gaming

The GST Council's recommendation to levy a 28% tax on real-money gaming has caused a stir in the burgeoning industry.

• Even as skill-based gaming platforms and their investors are urging for a more favourable regime, video gaming firms are facing the consequences of the widespread confusion surrounding this measure.

Driving the news: Over 45 Indian gaming studios have written to the Prime Minister's Office, the Ministry of Electronics and Information Technology, and the Ministry of Information and Broadcasting, requesting that video games and real-money games be distinguished in India, as is done across the world.

• In the letter, the companies have asked for video games to be categorised as separate entities from real-money games and fantasy sports.

Why does it matter: The 28% GST doesn't apply to video games, as they do not involve a staking or a wagering element. Instead, they are taxed at a rate of 18% GST, which is already included in the app sales on Google Play Store and Apple App Store.

However, in India, video games are consolidated with real-money games under the same "online games" umbrella. This is unlike other markets, where games involving wagering are categorised as iGaming, regardless of whether they are based on skill or chance.

• Many perceive this as a signal that Indian authorities apply blanket regulations to both industries.

What's the impact? This has resulted in international game corporations, publishers, and investors becoming wary of investing in Indian video game companies, exploring co-productions, or forming strategic partnerships. More on that here.

GST meeting likely on August 2

Meanwhile, real-money gaming companies are eagerly awaiting the GST Council meeting on August 2, where they hope to get clarity on the tax treatment for the sector and the rules that will be implemented.?

• While a rollback of the 28% tax is unlikely, the meeting is expected to resolve the issue of whether the tax should be levied on the entry value or each bet.

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