Regulating an industry necessitates looking at the big picture. And in the case of the gaming industry, the numbers paint a clearer image than political statements.
SevenJackpots India
Regulated online gaming can bring in Rs 6.60 lakh crore annually
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The Indian betting market grew about 7 percent between 2012 and 2018, reaching an estimated Rs 9.5 lakh crore ($130 billion), according to a 2019 KPMG report. Online gaming is estimated to be worth Rs. 20.5 crore ($2.8 billion), but while it is much smaller, the segment is forecast to grow by as much as 40 percent by the end of 2021 and represent 10 percent of India’s Media and Entertainment economy.
These figures are important, particularly since imposing taxes on a popular market is a necessary consideration for many jurisdictions. In India’s case, the country is already considered to be the second largest internet consumer in the world—next only to China—with more than 560 million internet users.
To put things in better perspective, analysts at SevenJackpots mapped out the tax revenue that the government stands to gain based on the stated market size calculated against the current Bharat taxation system. They found that, “Based on the above market size, online game operators would end up paying around Rs 53,000 crore in annual taxes by 2025-2026. Taxing all gambling in the country might bring in up to Rs 6,60,000 crore in the same year. The Centre currently collects only a fraction of that.”
That amount will add up to Rs 33 lakh crore in five years and doesn’t include licensing fees, according to the SevenJackpots report.
Regulated gaming provides safety nets for operators, players
A regulated gaming industry doesn’t just mean better tax collection for the state coffers, it also provides safety nets for both the government and companies, as well as for players via responsible gambling measures that provide a safe gambling experience for all players.
Put simply, a regulated industry isn’t about authorities regulating the technology—it’s about laying out the foundation for fair competition and tech transparency, as well as improved personal data protection. These bring better transparency to the market, which, in turn, boost investor confidence that the industry is stable.
Data has shown that India has the potential to regulate its rapidly growing gambling industry, the question that remains is when. Currently, a number of state governments are moving towards either regulating or completely banning online gambling in their jurisdictions, although these “unconstitutional” moves have been repeatedly struck down by high courts.
Uday Walia, from Touchstone Partners law firm, is optimistic that a regulated India “will come sooner than later.” In an interview with SevenJackpots, Walia said: “Indians today are far more comfortable and used to using technology than they were even before the pandemic started. The technological boom coupled with the greatly affordable mobile internet packs has brought a world of change to how India signs in. Certainly, the Indian market is ripe for a greater push of online gaming and gambling. All it lacks is the proper political will to make it happen.”
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