Real Money Gaming Startup Fantok Suspends Operations Following 28% GST Levy
- ByStartupStory | August 24, 2023
Fantok, a real money gaming app, has announced the suspension of its operations due to the Indian government’s decision to uphold a 28% Goods and Services Tax (GST) on online gaming revenue. The company cited challenges stemming from evolving regulatory measures in the Indian real money gaming sector as the reason behind this move.
In a statement, Fantok expressed the efforts its team had invested in creating an engaging platform for the prediction market. However, the shifting regulatory landscape and the imposition of a 28% GST on the total realized amount, coupled with issues related to high Tax Deducted at Source (TDS) and payment gateways, prompted the company to reassess its direction.
Fantok’s legal advisors pointed out the uncertainties created by the current environment, leading the company to temporarily suspend its operations. The decision aims to provide time to explore a pivot that aligns with both regulatory requirements and the company’s mission of delivering meaningful experiences to users.
Founded in 2022 by Ronak Ahuja, Prakhar Saxena, and Ashok Vishwakarma, Fantok had gained significant traction, boasting over 15,000 downloads and a community of more than 130 creators within just three months.
Fantok’s case isn’t isolated; it joins a growing list of startups affected by the 28% tax levy. Mobile Premier League and Hike’s Rush Gaming recently underwent workforce reductions as cost-cutting measures. Mobile Premier League laid off around 350 employees, while Rush Gaming released approximately 55 employees.
The decision to impose a tax on gross gaming revenue drew criticism from gaming companies. Roland Landers, CEO of the All India Gaming Federation, denounced the move as “unconstitutional, irrational, and egregious.”
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