The world’s most populated country yields a gambling market as unique as the culture within which it exists. India is a huge cultural and economic contributor internationally and, it goes without saying, one of the most influential nations on the global stage. However, India’s approach to gambling remains, for lack of a better definition, unclear.
Beginning with the absolute basic, gambling is somewhat culturally accepted in India, but the market for games of chance remains entirely unregulated. Put simply, games of chance are played in India, but not legally. The distinction between games of chance and games of skill is vital to understanding India’s market – and while this is something that is most certainly up for debate on a global scale, Indian governments has drawn the lines clearly and definitively.
Poker, Rummy (a form of card game), daily fantasy and horseracing are all considered games of skill in India through judicial pronouncements of the high courts and the Supreme Court. Therefore, as they are viewed as games of skill, they remain outside of the legislative jurisdiction of the Public Gambling Act of the States. In other words, different states do have their own public gambling acts in India, but there is a general consensus that the aforementioned games are that of skill and hence they remain legal.
Looking back five years, there was a bid launched by the Law Commission of India to open up the nation’s gambling market to full regulation. The bid was rejected by the Supreme Court.
Indeed, there is no doubt that a fully regulated gambling market in India would have massive upward potential, partly due to the huge and generally sports obsessed population. However, in the five years since the unsuccessful bid, the market certainly hasn’t looked in need of a push. By 2023, India’s online gambling market size reached $2.7bn, and is now growing at a CAGR (compound annual growth rate) of 8.10% as of 2024. A huge surge in online gambling, spurred on by the nation’s continuous infrastructural development and young population, have contributed to the growth of the market greatly. Gambling platforms that are regulated in India also seem to know how to behave and generally adhere to regulation with a minimum of fuss. The country’s adoption of digitalised payments has also served to expediate the online transition. However, in October 2023, the Government imposed a massive tax hike of 28% on online gaming – startling many skill gaming operators who became apprehensive as to the potential knock-on effects of the move.
Following the 28% levy on online gaming tax, many expressed concerns that the hike would inevitably stifle foreign investment. Indeed, it did – at first. However, many larger investors saw it as an opportunity. Firstly, despite yielding a now-higher tax rate, something India doesn’t have – aside from in a few states – are licensing fees. Secondly, many larger investors recognised the temporary decrease in valuation of existing players and decided to commit to their prior investment. Subsequently, what India has seen a year down the line is a staggering 400% increase in gaming tax revenue.
Despite the silver linings, the move has not come without a price. Many operators have chosen to move towards the black and grey markets as a means of avoiding the increased tax rate. As with the rest of the world, India has had its issues with problem gambling. However, as an infrastructurally developing nation with a huge population, gambling operators moving towards unregulated spaces – as opposed to away from them – is certainly cause for concern.
Many believe the introduction of the tax hike shows that the Government has realised just how big the market could be – a fact that is backed up by the increase in gaming tax revenue. Further to that point, many also believed at the time that the introduction of the 28% online gambling tax could be a sign of additional regulation further down the line. Now, with the additional incentive of pulling operators back away from the unregulated black and grey markets, a sense of regulatory anticipation is palpable – but it could take some time.