Online gambling scenario in India

14 April 2013

India has recently become a potential gold mine for online gambling operators. This is mainly due to the current financial growth of their middle classes and the exponential increase in the number of people in that country who now have access to the Internet.

According to statistics that have been published by MECN (Media Entertainment Consulting Network), Asia and primarily India is easily the largest and also the fastest growing online gambling market in the world. With India’s massive adult population more than three times that of the United States and a growing proportion of those adults not only having more money to spend but also having access to the Internet, there is huge scope for gaming firms to attract new business.

According to gaming statistics, 40% of the India population that have a computer and internet visit online gambling websites.

India is a card-loving nation. A massive market that is going to go to the companies that can hit the ground running.

Market size

The lack of regulation and the huge underground market makes estimating the size of India’s gambling market tricky. However, it is believed that the total market (including online and land-based gambling) is in excess of $70 billion.

India’s gaming industry is booming with a base of over 100 million internet users and 41 percent of them regularly accessing gambling websites. Nearly 75% are from just 4 cities (Delhi, Mumbai, Chennai and Bangalore).

Current research shows that usage of the Internet in India has grown 20 times larger in the past five years,  and with their broadband technology still behind the rest of the world, it allows for the industry to increase even more as their access improves.

Research conducted by Playwin (the lottery owned by the Indian state of Sikkim) in 2010 concluded that a fully regulated online gambling market in India would be worth $5 billion.

 

Legal scenario

Excluding national lottery, offline betting or gambling is illegal in most of India. Only three states allow offline gambling: Goa, Sikkim, and Daman. But there is no strong gaming law that makes online betting an illegal activity. Offshore betting companies are using this ‘loophole’ to lure Indians to bet on pretty much everything. The Indian Premier League (IPL) tops their lists, but casino, and card games like rummy and poker are gaining an immense number of followers.

While bookmakers in India are illegal, there is no specific law in India which bans an individual customer from placing an online bet or play casino online poker with an operator based outside India.

With current gaming laws, we can assume that online gambling in India is neither legal nor illegal. In fact, there are no provisions whatsoever in Indian law that mention gambling online. Because land-based gambling is banned through much of India many assume this extends to the internet, but there are no enforcement policies that might prevent Indian players from gambling online, so there is a huge lack of information for the user regarding the matter. 

However, RBI (Reserve bank of India) and FEDA (Foreign exchange dealer association) regulations are much more restrictive and clear regarding the transactions involved in online gaming business (we will elaborate in this in coming news).

India has a booming offline underground gambling scene, despite severe restrictions. A regulation on the matter could tackle the problem.

Legal trend

Small north-east Himalayan state of Sikkim, has already made huge steps towards regulation of online gambling by issuing a memorandum known as Sikkim Online Gaming (Regulation) Rules, 2009. This is the first ever process that outlines the rules and regulations for online gambling licensing within India, but due to obstacles by central government the process has been stagnant for the past two years. Foreign renowned operators showed interest in the process.

Eventhough many think that Sikkim process has been a waste of time, it has set up a benchmark for future regulation. It’s been (and probably will be) a rather slow process, but many Indians and foreign firms are staying tuned to Sikkim as this is the best chance to see online casinos, card rooms, and cricket betting sites online legal in India in the near future.

 

 

 



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