It is estimated that more than 300 million Indians are active gamers who participate in online gambling. These gamers enjoy online casino and betting live game (such as these). Besides personal entertainment, the main motivation for these gamers is the prospect of earning extra income. While the Indian Government recognizes the existence of such earnings and has in place tax collection regulations for the same, it is yet to create updated laws for online gmabling.
This article will discuss how online gambling is currently conducted in India and the importance of regulating this lucrative market for the Indian Government as well as other stakeholders, such as the players, as well as aspiring and existing casinos.
The State of Online Gambling In India
Gambling in India is regulated by the state laws and the central legislation, The Public Gambling Act of 1867. As of 2020, Goa, Daman and Sikkim are the only three states in India that permit physical casinos to operate. As a result, many players in different states opt to gamble in black market casinos.
The state of matters in the gambling sector in India has not only created room for illegal casinos but also popularized online gambling. Unfortunately, the existent Indian law governing the gambling industry does not clearly address online casino operations. Apart from the local tax laws for collecting revenue from online gamblers, most online casinos are foreign owned and governed by global licenses.
The old and unclear legislation coupled with foreign licensed online gambling companies have created conduits for tax evasion and illegal gambling. Many Indian players have fallen victims of scam companies operating in the online gambling black market.
How Lucrative Is Online Gambling?
As one of the states that permits legal gambling, Goa’s casinos generate a tax revenue of over 100 crores rupees. Analysts have also predicted that the state revenue from gambling could go up to $1billion in the near future.
It is also estimated that the Indian gambling market yields more than $60 billion annually. Unfortunately, at least half of this amount is from illegal gaming channels. Further to the revenues, legalized gambling in Goa and Sikkim has opened doors of opportunities for many Indians. Reports show that about 7,000 individuals are directly employed in the gaming industry while 3,000 indirectly support the industry through telecommunications, marketing and financial sectors.
Numbers do not lie and if the above figures are anything to go by then the Indian gaming sector portends a massive potential. According to the Federation of Indian Chamber of Commerce and Industry (FICCI), the government forfeits at least 19,000 crore rupees annually from sports bets by illegalizing betting.
Why Is Online Gambling Legislation Important?
The outdated online betting legislations are hurting the Indian gaming industry and leaking out important revenues for the states and the central government. The following are some of the main reasons why India should consider legislating the online gambling industry:-
- Creation of an even playing field. The lack of legislation has made it so expensive to open and operate online casinos in the country. Currently, many gamers opt for foreign betting sites because of the scarcity of online gaming sites in India. Creation of favorable regulations would create an even playing field with more Indian online casinos.
- Consumer protection. Fraud in the black market casinos and foreign scams in the online gaming industry are far too common. Many players have lost their money and earnings to unscrupulous betting sites. Regulating this industry would therefore reduce these cases and offer sufficient consumer protection and room for redress in the event of a betting dispute.
- Streamlined revenue collection. Foreign online betting companies are governed by foreign legislation and as such are not bound to submit tax reports to the Indian government. Without proper legislation, the onus of remitting taxes from betting earnings lies with the players. If India regulates the online gambling industry, it will have a streamlined channel for collecting much needed revenue.
It goes without question that betting in India has grown in popularity, providing lots of potential for revenue generation and job creating in the country. However, the century old legislations fall short in terms of offering proper guidance and regulation for the market. The government of India can change this by updating its laws in order to start earning revenue and other benefits from the betting sector.