Gameskraft's ₹2,600 crore rummy empire collapsed when the government changed the tax rules

Gameskraft was founded in 2017 and built RummyCircle into one of India's most popular online gaming platforms. The company classified online rummy as a 'game of skill' — a distinction recognized by Indian courts since the 1960s — and paid 18% GST on its platform commission, not on the full value of bets placed by users. By fiscal 2023, the company had revenue of ₹2,662 crore (roughly $320 million) and profit of ₹1,062 crore.

In September 2022, the Directorate General of GST Intelligence (DGGI) issued a show-cause notice demanding ₹21,000 crore (about $2.5 billion) in alleged unpaid GST. The tax authority argued that online rummy was a 'game of chance' and that 28% GST applied to the full face value of every bet, not just the platform's commission. The notice was retrospective, covering the period from 2017 onward.

Gameskraft challenged the notice in the Karnataka High Court, which ruled in the company's favour in May 2023, quashing the demand. The GST department appealed to the Supreme Court, which stayed the High Court's order in September 2023 and revived the proceedings. Meanwhile, the GST Council amended the law in August 2023 to impose 28% GST on the full bet value for all online games — skill or chance — effective October 2023, overriding the High Court's interpretation for future transactions.

In May 2026, the Supreme Court upheld the 28% GST on the full bet value, ruling that the 2023 amendment applied retrospectively and validating the government's demand against Gameskraft and other gaming firms. The Enforcement Directorate (ED) froze and attached assets totalling ₹2,401 crore, and in May 2026 arrested the three founders under the Prevention of Money Laundering Act. The company complied with the Online Gaming Act 2025, halted real-money gaming, laid off 120 employees, and shut down its fantasy sports platform Gamezy Fantasy and poker platform Pocket52.