BENGALURU (Reuters) – Shares of Indian online gaming firms, including Nazara Technologies, Onmobile Global, and Delta Corp, experienced a decline on Wednesday after the government imposed a 28% tax on funds collected by online gaming companies from customers.
Despite Finance Minister Nirmala Sitharaman’s assurance that the decision was made after consulting with states and without intending to harm the industry, industry representatives expressed concerns about the impact on earnings.
Nazara Technologies clarified that the tax would only apply to the skill-based real money gaming segment, which contributed 5.2% to consolidated revenue in the fiscal year 2023. The company expects the overall impact on revenue to be minimal.
However, the tax does not differentiate between skill-based games and those based on chance, according to Maharashtra state minister Sudhir Mungantiwar’s statement on Tuesday.
As a result of the tax announcement, shares of Nazara Technologies and Onmobile Gaming initially dropped by as much as 14.2% and 8.9%, respectively, before recovering some losses. On the other hand, Delta Corp experienced a 10% decline, hitting its lower circuit.
Despite the recent decline, year-to-date, Nazara Technologies has risen by 21.6% and Delta Corp by 15.9% as of Tuesday’s close, while Onmobile has faced an 11.9% fall.
The gaming industry in India will closely monitor the implications of the tax and its potential impact on future earnings.
Credit: The Star : Tech Feed
