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Is the State of Online Gambling in India About to Change?

Gujarat appears to be an outlier as much of India sees the potential of its online gambling market

As is the case with many countries around the world, online gambling is currently in a state of uncertainty in India. In a vast nation of over 1.3 billion people that boasts in excess of 600 million people online, online gambling operators and developers see a lot of opportunity in India. This thinking is further supported by the fact that there is a large online gambling audience in India already, despite the current state of gambling laws.

Technically, online gambling is prohibited across India, but the statutes which are currently applied to the industry can be both unclear and outdated. However, there have been moves made by significant parties in India to change the way that the laws on gambling are applied.

The state of gambling laws in India

With regards to gambling, all gaming and betting laws are enacted as state legislation by each state government. Two statutes have control over gambling in India: the Indian Constitution 1950 and the Public Gambling Act 1867. Despite the 1950 Constitution, many states presided to adopt the 1867 Act while others created their own gambling acts that were modelled on the 1867 Act.

This has resulted in the state of gambling across India being somewhat varied from legislation to legislation, but very little by way of modern law. The archaic provisions of the statutes and any amendments made thereafter are considered to be extended to apply to the online space, as explained by ICLG, a provider of international comparative legal guides. Only three of India’s 29 states and seven union territories – Nagaland, Sikkim, and Telangana – have specifically enacted laws which apply to online gambling, and they merely extend the application of current gambling laws to the online space.

Casino
Hotels & Resorts, along with Casino Mahjong support and promote online gambling. Flickr

The gambling laws of the majority of states and union territories exclude games of skill as a form of gambling, without detailing such games, and generally prohibit people from gambling for profit gain. The standing laws expressly prohibit anyone from being in or a part of any premises where gambling games are played for profit gain. While it is being tested on its value as a game of skill instead of gambling, poker is legal in many parts of India due to it being considered a game of skill.

There are some exceptions, however, with the states of Goa, Daman, and Sikkim all allowing land-based or floating casinos. In 2010, Sikkim attempted to start up the first regulated online gambling space in India by offering three gambling licences to operators willing to accept their terms. Despite the huge market and interest from local and foreign operators, Sikkim failed to grant any licences as a part of this plan. To this day, Indian states do not licence or regulate online gambling, with the activity effectively deemed to be illegal by all measures of the law.

The state of play in India

Regardless of the archaic and dismissive nature of state law in India, online gambling is a hugely popular pastime across the nation. Sports betting takes precedence, with betting on cricket and horse racing being the most popular; casino gaming is also a much-enjoyed activity among the internet population of India. Without any regulation or licensing body, it’s difficult to gauge the value of the online gambling market in India, but many estimates put the entire gambling market to be worth over $60 billion potentially.

Gambling, Lottery
Gambling is one activity that has lifted many from rags to riches. It involves predicting specific outcomes and getting your winnings. Pixabay

Foreign iGaming operators have already discovered the market, offering their services across the country with playing options catered to Indians, including the use of the Indian rupee. To truly show the scope and instated draw of the Indian online gambling audience, even third-party services cater their offering to the Indian public, as shown by SlotCatalog, which provides comprehensive analytics of online slot games, offering specific information on games pertaining to Indian gamers.

The future of gambling in India

As reported by Medianama, a source of analysis for digital businesses in India, the All India Gaming Federation approached the Bharatiya Janta Party and Indian National Congress ahead of the 2019 elections, suggesting that legislation to regulate the online gambling space should be included in their manifestos. Formally regulating online gambling under a centralised authority in a nation that’s as big and gambling-savvy as India would generate substantial tax revenue, create jobs, and aid in the battle against money laundering and match-fixing.

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Given the potential size of the online gambling audience already present in India, a tax rate in a regulated Indian online gambling space of between 15 to 30 per cent could yield the nation upwards of $1 billion from the get-go. That said, some jurisdictions are fighting against the increasingly embracing nature of India towards gambling, with Gujarat seeking to ban online gambling in its entirety within the state. The westernmost state has already banned non-gambling video games like PlayerUnknown’s Battlegrounds and has implemented some laws which prohibit land-based and online gambling.

Gujarat appears to be an outlier as much of India sees the potential of its online gambling market. The process has been stagnant thus far, but moves are being made to bring about a regulated online gambling space in India, it just depends on governments following through with effective lawmaking.

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