Regulations affecting gambling industry's growth in India: All you need to know

Regulations affecting gambling industry's growth in India: All you need to know

FPJ Web DeskUpdated: Friday, September 03, 2021, 09:49 PM IST
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Regulations affecting gambling industry's growth in India: All you need to know | Photo: Pexels

The overall gaming industry in India is expected to grow exponentially in the upcoming years. The gambling sector also plays a major role in the expansion of the overall gaming industry in the country. When we take a look at the factors that will affect the growth of this sector, we will notice that changes in the regulations are also a major contributor to the development of the gambling scene.

Based on the results from a recent report of Beyond the Tipping Point: A Primer on Online Casual Gaming in India, the gaming field in the country is expected to reach INR 290 billion ($3.91 billion) by 2025. Compared to this year’s market size of INR 136 billion ($1.83 billion), these estimates show an expected growth of 113%. It should be noted that these numbers include casual gaming, casino and card gambling, and fantasy sports.

Factors that Have Affected the Growth of the Gaming Industry

It was not that long ago when the gaming sector in India was exclusively reserved for players who owned expensive consoles. Nowadays, however, with the deeper integration of online and mobile gaming, the sector is enjoying a huge expansion. Currently, there are over 400 gaming companies or start-ups that have generated enough products to surpass the console-based sector in India.

As games can now easily be accessed online and on various handheld devices, there has been a huge surge in the number of active online players between the ages of 18 and 24. This age group represents about 60% of all online gamers in the country, contributing to the increasing popularity of online gaming in India.

Another factor that also fuelled the growth of the gambling sector and the overall gaming industry is the global pandemic. As the whole country was forced to lockdown due to the disturbingly increasing numbers of Covid cases, more people resorted to online gaming. A certain gaming platform soared to newer heights as it enjoyed more than 100,000 new users every day during that period. Meanwhile, many brick-and-mortar casinos started their online platforms, catering to the players who were constantly stuck at home.

Online gambling has also earned the attention of Indian players as it offers localized content that can be easily accessed. Many virtual casinos cater specifically to the preferences of Indian players, providing games like Andar Bahar, Rummy, Teen Patti, and Texas Hold’em Poker. Often the live-dealer versions of these games are hosted by dealers who are fluent in local languages, allowing Indian players to fully immerse themselves in the gameplay.

Online gambling requires making virtual payments with ease and still feel protected while doing so. As the fintech payment solutions in India are constantly developing, ensuring players smoother and more secure transactions, this has also contributed to the increasing popularity of online gambling. Indian players can handle their online casino accounts via solutions such as Google Pay, PayTM, and other digital payment methods that many find convenient to use.

Regulations that affect the Gambling Industry Growth

One of the regulations that contributed to the growth of the local gaming industry is the ban on well-developed international iGaming companies. This type of legal action gave Indian gaming companies more opportunities to develop and grow their presence on the local online gaming scene. The government of India has launched its Armanirbhar Bharat program to help the country become more self-sufficient. Supporting the local gaming industry and the development of games inspired by Indian culture is also a part of that program.

Another factor that will play a major role in the future development of the gambling industry in India is the legal framework that regulates the sector. As there is no common consent to the way gambling should be regulated in the country, different states have their own gambling laws and regulations. The majority of the states are still following the outdated Public Gambling Act of 1867. Not only is that law incapable of regulating online gambling as it did not exist back in the day, but it also lacks a clear definition of ‘games of skill’.

While most states have deemed bets on horse races and fantasy sports legal, many states do not permit playing Rummy and Poker as they fall under the category of “skill-based games”. This is not the case across all states in India, however, as they do not consider them as games of skill. This lack of legal unity can significantly slow down the growth of the gambling industry in the country. This is why there is a serious need for change in the current laws regulating the gambling in India.

There have been some signs of a possible implementation of a unified legal framework. In December 2020, the government’s policy think tank NITI Aayog proposed a centralized legal framework to regulate fantasy sports platforms in India. Rather than focusing only on fantasy sports, the policy institute was asked to introduce a self-regulatory body that will oversee the entire skill-based gaming industry in the country.

Estimates for the regulated gambling market in India by 2025 predict annual income of $1.4 billion from direct and indirect taxes. These numbers are enough to motivate policymakers to review the current gambling laws and introduce a legal framework that is up-to-date with the developing gaming sector in the country.

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