After 28% GST rule, real-money gaming startup Fantok suspends operations
A gaming app for real money Fantok has announced a temporary halt to operations, becoming yet another victim of the GST Council’s decision to maintain the 28% tax on online real-money games.
In the first week of this month, Spartan Poker and Mobile Premier League each let go of 350 and 125 employees. The new rules, according to MPL, will increase Spartan Poker’s tax burden by as much as 350–400%, despite the company’s official lack of comment.
“The imposition of a 28% Goods and Services Tax (GST) on the entire realized amount, along with high Tax Deducted at Source (TDS) requirements and challenges related to payment gateways, have compounded the operational challenges faced by the company,” Fantok said in a statement to media.
Fantok is a real money gaming app with a prediction markets focus that was founded in 2022 by Ronak Ahuja, Prakhar Saxena, and Ashok Vishwakarma. In just three months, the Gurugram-based company claims to have racked up over 15,000 downloads and a community of over 130 game developers who have contributed games to the platform with a trade volume of over $120,000.
“Our decision to temporarily suspend operations underscores our commitment to operating within a legal and compliant framework while exploring new avenues for growth. This pause will enable us to navigate these challenges thoughtfully and consider strategic pivots that align with the evolving landscape,” Ahuja said in a statement.
In order to choose the best course of action, the company further stated that it would keep talking to stakeholders, assess market dynamics, and review regulatory developments.
Online real-money gaming will now be subject to a 28% GST, which has already sparked controversy. All India Gaming Federation, Nazara Technologies, Baazi Games, and Winzo Games, as well as about 30 investors, sent a letter to the government asking it to rethink its decision to impose a 28% GST on such platforms. However, the GST Council chose to uphold its decision, which may now force more businesses to lay off employees and eventually close down operations like Fantok.
