Taxed to extinction The potential lack of money from the SC gaming ruling

The Supreme Court has dealt a severe blow to the nation's rapidly expanding real-money gambling industry in what is being touted as the most significant corporate tax battle in Indian history. The Supreme Court affirmed that a 28% GST on internet gaming, casinos, and fantasy sports is legitimate. Significantly, the court granted its application retroactively, resurrecting enormous tax demands valued at more than ₹2.5 lakh crore. The decision, which was made by a court that included Justices JB Pardiwala and R Mahadevan, essentially puts an end to years of vigorous legal wrangling by tech companies, industry associations, and gaming firms.

The court has significantly changed the financial and operational environment of digital entertainment in India by ruling that online money gaming with monetary bets qualifies as betting and gambling for tax purposes.The Supreme Court deconstructed the industry's fundamental defenses in two distinct but related rulings.The first ruling dealt with petitions by several State Governments against High Court rulings in Kerala, Tamil Nadu, and Karnataka that had previously overturned state-level prohibitions on online money gaming. The Supreme Court upheld the state limits by overturning those rulings.The legal nuance is explained by Sudipta Bhattacharjee, Partner at Khaitan & Co., who represented a number of well-known online gaming and casino companies in this group of cases: "In this first judgment, the validity of the anti-online gaming State laws of Tamil Nadu, Kerala, and Karnataka have been upheld by reading "betting" as something different from "gambling." In order to understand how basic constitutional bench rulings in RMDC and three-judge bench rulings in K.R. Lakshmanan have been handled in the context of online money gaming, it will be important to thoroughly examine this ruling.