The employment of Mobile Premier League (MPL), a well-known online gaming platform, is apparently being reduced by about 50%, affecting about 350 jobs. The 51st GST Council meeting upheld a 28% tax on the gross value of money made through online gambling, which prompted MPL to take action to resolve its financial difficulties.
A formal notification was handed out after the Bengaluru-based business first alerted its staff of the planned job losses last week. The founder and CEO of MPL, Sai Srinivas, said in an internal email that the main variable expenditures for a digital business are staff, server operations, and office equipment. The corporation must reduce its employees in order to remain viable and survive.
MPL, a company with a large market value in the gaming industry, had huge losses of over $149.3 million in FY22, up from $48.3 million in FY21. Investors that have supported the firm financially include Peak XV, Times Internet, MSA Novo, Crown Capital, Composite Capital, and Moore Strategic Ventures.
With over 90 million people registered throughout India, Indonesia, Europe, and the US, MPL, which was founded in 2018, organizes a number of monthly competitions.
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The government’s ongoing enforcement of a 28% GST on online gambling and the layoffs at MPL are related. Industry analysts claim that this tax strategy, which targets GST on deposits rather than the commissions from technology platforms, would make the company economics unviable, particularly harming MSMEs and startups using cutting-edge business models.
The revamped tax system aims to alleviate ambiguities, but according to the Federation of Indian Fantasy Sports and E-Gaming Federation, it saddles the business with a significant 350% rise in GST, which might put the Indian online gaming sector back for years. A ray of light for the industry’s future is provided by the GST Council’s announcement that tax rates and valuation choices would be reviewed after six months of putting these modifications into effect.
Conclusion:-
Mobile Premier League (MPL), a prominent online gaming platform, is facing job losses of around 50% due to the ongoing 28% GST Council meeting. The company, which has a large market value, had losses of over $149.3 million in FY22. The tax strategy targets deposits rather than technology platform commissions, potentially making the company economically unviable. Industry analysts argue that the tax system’s 350% rise in GST could put the Indian online gaming sector back for years. The GST Council has announced that tax rates and valuation choices will be reviewed after six months of implementation.
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