New Delhi

This sharp clarification landed during a key hearing that could reshape India’s online gaming and fantasy sports landscape. The court is currently weighing whether games like fantasy cricket, poker, and rummy — often claimed to involve skill — should still be taxed like traditional gambling and casino games.

The Indian government has made its stance crystal clear in the Supreme Court, betting on fantasy sports or skill-based games is gambling when money is involved. It doesn’t matter if it’s a game of skill or pure chance. If there’s a financial stake, it’s gambling, and it should attract a 28% Goods and Services Tax (GST). Government: stakes mean gambling, no matter the skill

Representing the Centre, the Additional Solicitor General (ASG) argued that the core issue isn’t about skill vs chance, but about the act of betting. “The moment you stake money on an outcome, it’s gambling,” the ASG told the court. The government compared betting on fantasy games to placing bets on how many goals Lionel Messi would score, participants can’t control or influence the outcome, even if their decision-making is skill-based.

In its submission, the Directorate General of GST Intelligence (DGGI) doubled down, stating that online gaming platforms have so far been paying 18% GST as if they’re service providers. But the DGGI argued this was incorrect, saying these platforms facilitate gambling and should pay 28% GST on the full entry amount, not just the platform fee.

States’ laws don’t matter for GST, Centre says

Backing this, the revenue department reminded the bench that the 101st Constitutional Amendment gave the Centre the right to tax betting and gambling under Article 246A. So even if states regulate gaming, it’s the Centre that has the power to tax it.

The Centre also rejected the idea that state laws exempting games of skill from gambling bans should affect tax treatment. Even in states like Nagaland, where skill-based games are legal, the moment stakes are involved, the activity falls under “taxable actionable claims” per the Central GST Act, 2017.

Legal experts push back on broad brush approach

“If games of skill are treated as gambling solely because of monetary stakes, we risk blurring crucial legal boundaries,” Rastogi said in court.

Not everyone agrees with the government’s sweeping classification. Abhishek A. Rastogi, founder of Rastogi Chambers and representing one of the petitioners, warned that this move could set a dangerous precedent. He argued that if games of skill are treated as gambling just because of entry fees, it could blur vital legal lines and affect the future of India’s growing digital gaming sector.

What’s at stake for gamers and platforms?

If the Supreme Court upholds the Centre’s stand, fantasy platforms may have to pay 28% GST on the total contest entry fee, which could significantly eat into user winnings and platform revenue. Currently, most platforms pay GST only on their platform fee or rake, which is a small fraction of the total prize pool.

The matter is now set for further hearing on Tuesday, May 6, with implications not just for revenue collection but for the entire fantasy gaming and real-money esports industry in India. If stakes equal gambling, the line between casual play and betting may soon vanish from a tax perspective.

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