Nazara Technologies has said that the government’s decision to levy a steep goods and services tax (GST) on online gaming collections will only affect its real money gaming segment, and the overall impact on the firm will be limited. However, shares of the gaming firm fell over 6% in early trade.

What Happened? Nazara Tech clarified in an exchange filing that the 28% GST will only apply to its skill-based real money gaming segment, which contributed just 5.2% to its consolidated revenues in FY23.

“To the extent required, the Company will proactively take steps to mitigate any potential impact to this segment of our business, and we anticipate minimal impact to our overall revenues,” Nazara said in a statement.

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The government on Tuesday decided to impose 28% GST on the total amount collected from players by online gaming platforms. The decision will likely take the shine off the fast-growing $1.5 billion (₹12,350 crore) online gaming industry—especially those related to fantasy cricket and the Indian Premier League, such as Dream11 and MPL.

While these real money games have risen in popularity, there have also been concerns surrounding addiction and losses for participants in these games.

Price Action: Nazara Tech’s share price dropped 6.45% to ₹659 at open on Wednesday.

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