Shillong(Meghalaya), April 18 : The UK India Business Council met with Cabinet Minister James Sangma and several UK businesses to discuss the online gaming and sports betting landscape in the State and to launch the UKIBC’s industry report: Gaming for Growth – India’s Sports and Gaming Market Potential.
The UKIBC’s Gaming Industry Index reveals Meghalaya to be the most gaming friendly States in India. The Index measures the extent to which each State has legalized gaming and betting based on their stance on seven different games: lottery, horse racing, sports betting, poker, rummy, casino, and fantasy sports. Meghalaya scored 92.85 (on a scale of 0 to 100 where 100 is fully legalised) with licenses applicable in all seven games in both states.
UK India Business Council, through its report, reveals how a clearer approach to regulation would: attract FDI; create jobs and growth; combat corruption; enhance the integrity of sport; increase the tax revenue in the State; and support the State’s wider tourism sector. The report proposes a series of recommendations to capture the large and growing opportunities for India to benefit from the sector’s growth.
Currently, different aspects of the industry, such as betting on sports, vary in regulation and legalisation across States. India’s gaming industry is broadly split into ‘games of skill’ and ‘games of chance’. Some States, such as Meghalaya, Goa and Sikkim, have created exceptions within their gambling acts for authorised gaming, issuing licenses for games of chance in casinos on land and offshore. In 2021, Meghalaya enacted the Meghalaya Regulation of Gaming Act 2021, wherein licenses pertaining to games of chance mentioned in its schedule are allowed under a license. It is expected in 2022 that licenses for it would be issued.
UKIBC Managing Director, Kevin McCole, said: “We applaud the Government of Meghalaya on its forward-thinking approach to the license of games of chance in the state, which will help to contribute greater revenues and bring jobs to the state. A regulated market also provides safeguards and protection for players, safeguards that are not available in the unregulated sector. It is clear that both the unregulated and regulated gaming sector in India will continue to grow significantly. There are therefore strong reasons to work towards this growth taking place under regulations. To do so, we recommend the Government of India adopts the Law Commission’s 2018 recommendation that sports betting be regulated. Not least because it will attract FDI, stimulate domestic investment, create jobs, generate government revenue, tackle corruption, and enable responsible playing.”
Most States permit games of skill, which are excluded from the remit of gambling. Without a legislative definition, the Supreme Court has established, in several cases, that games of skill are quite simply where the element of skill dominates the element of chance, and vice-versa for games of chance. As such, games including rummy, bridge, chess, and sports such as golf have since been classified as games of skill across India. Games of chance for stakes, however, do fall within the remit of State gambling acts and are largely prohibited.
In its report, the UKIBC makes several recommendations around the legalisation and regulation of the gaming market across India in line with the Law Commission’s 2018 recommendations. It also contends that the gaming market is regulated centrally to bring uniformity to the sector. Each state can then decide whether it wants to be a state to allow gaming and to what extent, therefore retaining a suitable degree of autonomy.
The UKIBC report also found that, in states where gaming is licensed, the imposition of tax at a rate of 28% on the face value of the lottery ticket or the amount bet (vis-vis horse racing and casinos) is one of the highest in the world and could be constraining State revenues. It proposes that India moves in line with the globally common practice of taxing on the rake fee (at the same rate of 28%), designed to improve the channeling rate of consumers to regulated platforms and therefore contribute higher State revenues.
In FY21, there were 433 million gaming users in India. Projections by KPMG predict that by FY25, that figure will be 657 million, thanks to increasing proliferation of smart phones and internet. This increase in users will also lead to increased revenue, from INR 136 billion (GBP 1.3 billion) in FY21 to INR 290 billion (GBP 2.9 billion) in FY25, representing more than 100% growth in four years.