India’s 28% GST on online gaming generated Rs 6,909 crore in its first six months, a 412% increase over the preceding half-year. Finance Minister Nirmala Sitharaman confirmed the figure at the 54th GST Council meeting in September 2024. Revenue Secretary Sanjay Malhotra projected annual collections of Rs 20,000 crore once the tax matured. For a country that spends 4.6% of GDP on education against a national target of 6%, that revenue represented roughly 10 to 15% of the funding gap.
Then, in August 2025, India’s Parliament passed the Promotion and Regulation of Online Gaming Act (PROGA), banning all real-money online games. The tax revenue disappeared with the industry. The estimated shortfall stands at Rs 56 billion ($670 million) in combined GST, TDS, and income-tax collections, according to industry estimates. A potential education funding pipeline was built, tested, proven effective, and then shut down in under two years.
The question now facing policymakers is not whether gaming tax revenue can fund education. Maryland in the United States has channelled $6.4 billion from casino revenue into public schools since 2010. The question is whether India will learn from its own brief experiment before the Supreme Court rules on PROGA’s constitutionality.
What the 28% GST Actually Generated
Before October 2023, online gaming companies in India paid 18% GST on their gross gaming revenue, the platform’s commission on each game. The effective tax rate, calculated against total player deposits, worked out to approximately 2 to 3%. Total GST collection from the sector in FY2022-23 was Rs 1,700 crore.
The GST Council’s decision to apply 28% on the full face value of player deposits changed the arithmetic entirely. Rather than taxing the platform’s cut, the government began taxing every rupee that entered the system. The CBIC Chairman confirmed in February 2024 that monthly GST collections from online gaming had reached Rs 1,100 to 1,200 crore, up from roughly Rs 225 crore per month under the old regime.
The industry objected. Companies argued the tax was confiscatory and would destroy the sector. Revenue data told a different story. In the six months following implementation (October 2023 to March 2024), Rs 6,909 crore flowed into government coffers from online gaming alone. The Revenue Secretary projected the annual figure would reach Rs 14,000 crore in FY2025 and stabilise at Rs 20,000 crore annually as compliance matured.
To contextualise that number, India’s total gross GST collection across all sectors in FY2024-25 was Rs 22.08 lakh crore. Online gaming’s projected contribution of Rs 14,000 to 20,000 crore represented approximately 0.6 to 0.9% of total GST revenue. A small fraction in absolute terms, but a transformative amount when measured against specific spending needs.
The Education Funding Gap This Revenue Could Have Addressed
India’s National Education Policy (NEP) 2020 set a target of spending 6% of GDP on education. Current spending sits at approximately 4.6%. That gap of 1.4 percentage points represents tens of thousands of crores in unfunded educational priorities, from rural school infrastructure to teacher training to higher education access.
The Ministry of Education received Rs 1,28,650 crore in FY2025-26, a 13% increase over the previous year and the highest allocation in history. Of that, Rs 78,572 crore went to school education and literacy. Despite the increase, a parliamentary panel recommended “concrete, time-bound steps” to reach the 6% target by 2030, according to PRS India’s budget analysis.
At the projected Rs 20,000 crore annual collection, gaming GST revenue would have represented approximately 15% of the gap between current education spending and the NEP target. That alone would not have closed the gap. But it would have funded specific, measurable initiatives: scholarships for students in tier-2 and tier-3 cities, digital infrastructure for rural schools, or teacher training programmes at scale.
The challenge was structural. India’s GST flows into the consolidated fund at both central and state levels, split 50:50 for intra-state transactions. There is no earmarked allocation of gaming tax revenue to education. The money enters the general pool and competes with every other spending priority. Without dedicated legislation, gaming tax revenue would have supplemented education budgets only to the extent that overall government spending increased.
The specific areas where this funding would have mattered most are identifiable. India’s school system serves over 250 million students. Rural schools in states like Bihar, Uttar Pradesh, and Madhya Pradesh lack basic digital infrastructure. Teacher vacancies persist across thousands of government schools. Scholarship programmes for students from economically weaker sections remain chronically underfunded relative to demand.
Rs 20,000 crore annually, directed through a dedicated education fund, could have financed internet connectivity in approximately 200,000 rural schools, funded 500,000 teacher training positions, or provided full tuition scholarships for over 4 million students at the average cost of public university education. These are not speculative numbers. They follow directly from published costs per unit in India’s education sector.
This is where international models become relevant. Several countries have solved the earmarking problem, and their results offer a blueprint that India’s policymakers have so far not adopted.
How Other Countries Built Gaming-to-Education Pipelines
Maryland provides the clearest proof of concept. The state’s Education Trust Fund, financed entirely by casino gaming revenue, received $606.2 million in FY2025 alone. Since the programme’s launch in 2010, cumulative contributions have exceeded $6.4 billion, according to the Maryland Gaming Commission. The money funds early childhood education, public elementary and secondary schools, and school construction.
The mechanics are straightforward. Maryland’s six casinos generated $1.96 billion in total revenue in FY2025. Of the $831.3 million in total state contributions, 73% went directly to the Education Trust Fund. The allocation is mandated by law, not subject to annual budget negotiations. Education advocates know exactly how much gaming revenue will deliver each year because the percentage is fixed.
Pennsylvania takes a different approach. Gaming revenue there funds a Property Tax Relief Fund that reduces school property taxes across 66 counties. The annual allocation of $1.11 billion covers approximately 7% of total school property taxes, providing measurable financial relief to families in every school district.
The United Kingdom introduced a statutory gambling levy in April 2025, replacing a voluntary contribution system. The levy raised approximately £120 million in its first year. Twenty percent goes to UK Research and Innovation for gambling research, and 30% funds prevention and early intervention programmes. While education is not the primary beneficiary, the UK model demonstrates that mandatory earmarking works at scale.
Finland routes revenue from its state gambling monopoly (Veikkaus) into sports, culture, science, youth work, and social welfare. The Nordic model shows that gaming revenue can sustain multiple social programmes simultaneously when the allocation framework is designed correctly from the start.
The pattern across all these examples is consistent. Gaming revenue becomes a reliable education funding source only when legislation mandates the connection. Voluntary contributions and general-fund approaches consistently fail to deliver sustained investment. India’s brief experiment with the 28% GST proved the revenue was there. The missing piece was the pipeline.
Organizations that track how casino apps contribute to scholarships and grants have documented this pattern in detail. The evidence is growing that responsible gaming regulation, paired with earmarked taxation, can create durable funding for educational institutions.
What the August 2025 Ban Cost
The Promotion and Regulation of Online Gaming Act received presidential assent on August 22, 2025. It banned all real-money online games without distinguishing between skill-based and chance-based formats. The previous legal framework, built on decades of Supreme Court jurisprudence that treated rummy and fantasy sports as games of skill exempt from gambling prohibitions, was overridden by a single piece of legislation.
The financial consequences arrived quickly. Asset write-downs across the industry exceeded $840 million. Flutter Entertainment, the US-listed parent company of Indian gaming platform Junglee Games, recorded a $556 million impairment. Nazara Technologies wrote down $103.2 million. Paytm’s net profit dropped 98% after a $21.4 million impairment on its gaming subsidiary.
Employment losses followed. The industry had supported more than 130,000 skilled professionals in 2024 and was projected to create 2 million jobs by 2034. Approximately 7,000 workers lost their positions in the immediate aftermath. Dream11, MPL, PokerBaazi, and WinZO suspended their cash gaming operations. Hike’s gaming app Rush shut down entirely.
The tax revenue pipeline that had generated Rs 6,909 crore in its first six months went dry. The Rs 14,000 to 20,000 crore in projected annual GST revenue evaporated. India’s experiment with taxing online gaming at a rate high enough to fund significant social programmes lasted less than two years.
What Happens Next
Multiple petitions challenging PROGA’s constitutionality are before the Supreme Court. The consolidated hearing, originally scheduled for January 2026, has been deferred. Legal analysts quoted by Yogonet have suggested the blanket ban is “unlikely to withstand constitutional scrutiny,” though the timeline for a ruling remains uncertain.
If the Court strikes down the ban or the government replaces it with a regulatory framework, the question of how to allocate gaming tax revenue will return. The 28% GST infrastructure is already in place. The collection mechanisms have been tested. The only missing component is the legislative link between gaming revenue and specific social spending, including education.
For platforms that operate outside India’s domestic jurisdiction, including international casinos licensed in Malta, Gibraltar, and Curacao, the regulatory situation creates a different dynamic. Indian-origin card games like Teen Patti continue to be available on these platforms for players in jurisdictions where online gaming is legal. TeenPatti.us.com tracks which international platforms offer the game with proper licensing and transparent player protections.
The broader policy lesson extends beyond India. Charitable contributions from gambling companies have grown in recent years, but voluntary CSR programmes cannot substitute for the scale of mandatory tax allocation. Maryland’s $6.4 billion to education over 15 years dwarfs what voluntary programmes have ever delivered. The evidence supports mandatory, earmarked taxation as the only model that reliably converts gaming revenue into educational outcomes.
Frequently Asked Questions
Rs 6,909 crore in the first six months (October 2023 to March 2024), a 412% increase over the preceding six-month period. The Revenue Secretary projected annual collections of Rs 14,000 crore in FY2025, with a longer-term estimate of Rs 20,000 crore per year at maturity.
No. India’s GST flows into the consolidated fund at central and state levels, split 50:50 for intra-state transactions. There is no earmarked allocation to education. Unlike Maryland’s Education Trust Fund, which mandates a fixed percentage of casino revenue for schools, India treats gaming GST as general revenue.
Over $6.4 billion since 2010. In FY2025 alone, Maryland’s casinos contributed $606.2 million to the Education Trust Fund, which supports early childhood education, K-12 schools, and school construction. The allocation percentage is fixed by law.
The revenue pipeline collapsed. The Promotion and Regulation of Online Gaming Act banned all real-money online games, eliminating the tax base. The estimated annual shortfall is Rs 56 billion ($670 million) in combined GST, TDS, and income-tax collections. The industry recorded over $840 million in asset write-downs.
India currently spends approximately 4.6% of GDP on education. The National Education Policy 2020 set a target of 6%. The Ministry of Education received Rs 1,28,650 crore in FY2025-26, the highest allocation in history, but a parliamentary panel noted the gap remains significant and called for time-bound steps to reach the target.
The data suggests yes, when paired with mandatory earmarking. India’s projected Rs 20,000 crore in annual gaming GST would have covered 10 to 15% of the gap between current education spending and the NEP target. Maryland’s 15-year track record of $6.4 billion in gaming-funded education spending confirms the model works at scale with proper legislative architecture.