Online gaming company WinZo expands base to Brazil amidst taxation hurdles in India

In a significant move, online gaming company, WinZO, on Thursday, October 5, announced its expansion into Brazil. The strategic decision comes at a time when Indian gaming companies are grappling with a hike in the Goods and Services Tax (GST), a move that has been a major roadblock for emerging startups in the sector. The company is investing $25 million in Brazil, focusing on distribution and brand building for its 100+ game partners.

The company highlighted that taxation rates for gaming commissions are significantly lower in countries like the United States, the United Kingdom, Australia, and Germany, ranging from 6.75% to 21%. These rates are much lower than the 28% GST on full face value of bets that the new taxation policies puts down in India. Brazil levies indirect taxes such as 2-5% as municipal tax, applicable to the commission earned by the company.

"WinZO is committed to developing a 'Made in Bharat' consumer tech product that resonates with and caters to the interactive entertainment needs of young users worldwide. We had plans of going global but the new GST regime has accelerated the plans. The new GST regime will have impact on monetization, both top and bottom line, across the industry," said Paavan Nanda, Co-founder of WinZO.

The company aims to leverage Brazil's booming mobile gaming market, which witnessed about 4.6 billion mobile game downloads in 2022, to provide a platform for Indian game developers to showcase their talent on a global stage.

The company said that apart from being a booming online eco-system, Brazil also provides the push to online gaming with its regulatory scenario. “The regulatory landscape, the push that the Brazilian government is giving to online gaming ecosystem is very favorable,” said Nanda.

The co-founder of the online gaming company also said that he has high hopes from the government about the six-month review planned for the new GST regime. “The government should look at the sector which is considered to be a sunrise sector in India and see the impact on small and medium companies in the sector. People are losing jobs and there is no capital coming into the sector. Some of the smaller startups have shut shops. It is important to watch the industry and have a good check on what happened in the six months. We are hopeful that the six-month review will bring good news," Nanda told CNBC TV-18. 

The company will also represent the first-ever India Pavilion at the Brazil Game Show, Latin America's largest gaming event. With over 150 million users and $100 million raised from marquee gaming and entertainment investors, WinZO is already a significant player in the Indian market.