Gameskraft Pauses Operations Of Online Poker Platform Pocket52

At a time when the country’s online gaming ecosystem still seems to be trying to come to terms with the 28% GST regime, real money gaming startup GamesKraft has announced a “strategic pause” on the operations of its poker platform, Pocket52. 

In a statement, the startup said that the pause is part of its broader plan to reassess and reimagine its long-term approach to the category.

“… The company has recognised the need for a deeper momentum and a more focussed strategy to meaningfully scale and deliver a differentiated experience to players. Staying true to this commitment, Gameskraft has announced a strategic pause in the operations of its Poker platform, Pocket52, as part of a broader plan to reassess and reimagine its long-term approach to the category,” said Gameskraft in its statement. 

The startup claims to have already sent relevant communication to the platform’s users and will discontinue the ‘Add Cash’ feature on May 22. Saying that the poker platform’s gameplay will end on May 30, Gameskraft added that the app will be accessible till July this year.

The Bengaluru-based company assured that the customers’ funds will remain secure after the announcement. Gameskraft will further inform the users about the standard withdrawal process through which they’ll be able to access their funds. 

Notably, Gameskraft also claimed that the suspension of the Pocket52’s operations will not lead to layoffs. 

“All existing customer funds remain secure and will be accessible through standard withdrawal processes that will be communicated to all players. Furthermore, this pause does not impact the employee strength of the company,” it added.

Pocket52 claims to have more than 16 Lakh registered players on its platform. 

“We remain committed to the Poker ecosystem in India. This pause allows us to reimagine what a best-in-class Poker platform should look like, one that delivers excellence, innovation, and sustainable impact,” Gameskraft said. 

Founded in 2017 by Prithvi Raj Singh, Deepak Singh, Rajkumar Taneja, and Sindhu Devi Jha, Gameskraft also operates real money gaming platforms such as RummyCulture, RummyPrime, Playship and LudoCulture. 

It earns revenue from commission or platform fee from the amount users pay to join a game or tournament. 

Gaming Platforms Caught In The Tangle Of 28% GST

The development comes at a time when the 28% GST regime has hit gaming companies hard. 

In October 2023, a 28% GST was imposed on real money gaming. The tax is levied on the total value of bets for online games, irrespective of whether they are games of skill or chance. Previously, a lower 18% GST was levied, specifically on the platform fee for skill-based games.

Following this, tax authorities began dishing out notices to the platforms. As per government data, as many as 71 companies including Gameskraft, Dream11, Games 24×7, and Head Digital Works have received show cause notices totalling INR 1.12 Lakh Cr under the new tax regime. 

Following the imposition of the new regime, major players like Mobile Premier League (MPL), Hike, and Spartan Poker resorted to layoffs, while smaller platforms such as Fantok and Quizy shut operations.

Subsequently, many of these gaming players moved the Supreme Court (SC) to get a stay on these notices. In January, the SC put a temporary halt on these proceedings against 49 real money gaming companies, staying retrospective demand notices. 

In the last hearing on May 13, the platforms challenged the Centre’s classification of participation fees for skill-based games as “actionable claims” before the SC. Senior advocate Harish Salve, representing E-Gaming Federation (EGF), contended that treating the participation fees as actionable claims under GST law was misconceived. 

During a previous hearing earlier this month, online gaming companies told the apex court that the industry does not oppose the prospective levy of 28% GST on the full face value of entry amounts, but it is against applying the tax retrospectively.

Meanwhile, the Directorate General of GST Intelligence (DGGI) informed the SC that online gaming companies are engaging in activities that qualify as betting and gambling, which are subject to the GST. The DGCI’s stance is that amounts staked by players in these games are taxable under the GST framework.