New Delhi, June 3 -- Late last month, the Supreme Court of India rejected the argument of online gaming platforms that the goods and services tax (GST) they pay should be calculated on what they call 'gross gaming revenue' (GGR)-the money left with them after they distribute winnings-and not on what customers shell out.

The court ruled that GST is a tax on supply and hence must apply to the transaction value, and the outcome of it should be immaterial. This was a blow not just for India's money-betting platforms that wanted just their fees taxed, but also casinos that operate on a similar model.

By law, GST is levied on the sales turnover of taxable supplies, but the gambling-service industry sought to define what that means for it. Its...