Regulatory Challenges and Opportunities for Online Gambling in India

Online gambling is one of the fastest-growing entertainment industries in India. Increased smartphone access means that every adult can play casino games of chance legally and safely in India.

While smartphones help enhance access to online gambling, India’s laws present a major challenge for casinos. Online gambling is not yet legal at the federal level. The government has plans to license casino sites later this year. But in the meantime, only Goa, Sikkim, and Nagaland have legal iGaming laws. 

Against that backdrop, here is a deeper overview of regulatory challenges in the Indian iGaming space. We’ll also look at the impact of online casinos in India and opportunities for new investors. Let’s get started.

Unclear Gambling Laws

One of the biggest issues for new casinos in India is that the law hasn’t always addressed the legality of online casinos. India first made a law to regulate gambling in 1867, long before the Internet became a thing. The law criminalized all forms of gambling. 

India updated its gambling laws with a new act in 2000. The Information Technology Act permitted states to regulate online gambling.

Sikkim created India’s first legal iGaming laws in 2008. It legalized both sports betting and online casino games. Goa first legalized casinos in the late 1990s—the first land-based casino opened in 1999. The state later made a provision to introduce online casinos.

Nagaland hit news headlines in 2015 after it banned most forms of gambling. The state made its laws to permit games of skill alone. Despite this law, online poker is legal—it is a game of skill.

Delays in Creating a Regulatory Body

Last year, the government created new regulations to permit online gaming with the supervision of Self-Regulatory Organizations (SROs). Four organizations applied for licenses to take charge of iGaming regulation.

Unfortunately, the government rejected all applications. Officials cited a lack of competent experts from diverse career paths—psychologists, educators, human rights activists, and tech experts as the reason for denying these operators licenses.

After failing to find a competent SRO, The Ministry of Electronics and Information Technology (MeitY) created a special board to help come up with an SRO that fulfills the government’s requirements.

 Until earlier this year, the government believed an independent organization made up of all the stakeholders in iGaming was the best approach to regulate the industry. 

Gamblers and casinos can create ideas to help casinos succeed. On the other hand, psychologists and human rights activities can help lower problem gambling in the country. Meanwhile, financial experts can educate players while government officials will safeguard the government’s interests.

  The government abandoned plans for self-regulation earlier this year. It will regulate the sector through the Ministry of information.

No Clear Gambling Guidelines for New Casinos

Another possible challenge for online casino investors is that the government hasn’t created a regulatory framework. It has yet to create license application rules. It has no guidelines on how to prevent financial fraud, how to enhance player safety, and provide quality services.

The government will probably release its regulatory rules after the elections are over. What’s more, investors can expect India to follow the policies used in established gambling jurisdictions like the UK, Malta, and the US.

For clarity, most casino regulators charge license application fees to every new applicant. It also provides rules casinos must follow. For example, new operators need to create secure websites. They must work with established payment providers and licensed software providers

Other important rules require casinos to run identification checks on their customers and offer tools to help minimize problem gambling. Besides the rules, the government needs to come up with a taxation policy.

The primary reason the Indian government is permitting online gambling is to increase its revenues. Online gambling companies around the world generate billions of dollars in tax revenues for local governments. For India to maximize tax earnings, it needs to create a lucrative tax policy.

India’s $3 Billion Market—An Opportunity for Investors

India is the world’s biggest online gambling market. It has 568 million users, more than the US and Brazil. Online gamers generate over $3 billion for the industry, making it a lucrative opportunity for investors in the gaming space.

By providing clarity about online gaming, the government has softened the path to expanding iGaming in the country. Casinos no longer need to operate through the black market.

They can apply for genuine licenses and provide slots and table games in all states. Previously, most casinos operating in India had licenses from foreign jurisdictions like Malta, Curacao, and Panama.

Offshore casinos are still popular in India. Many players love these sites because they offer big bonuses, fast payouts, and high-quality games. While these companies lack local licenses, they could act as a major competitor for licensed casinos. 

Competition should be expected in such a huge gambling market. However, the government can help suppress black market operators with progressive policies. For example, it can commercialize the sector to attract multiple investors. It should keep taxes low and work with operators to help grow their businesses. 

Mobile Gaming Dominate 

Mobile is India’s biggest platform for gamers. More than 80% of all players in the country play video games and slots through a smartphone. In all fairness, mobile gaming is huge throughout the industry.

The explanation is that smartphones are cheap and easily accessible. They also feature the sufficient technology required to run modern casino games. New casino investors eyeing India’s iGaming market need to prioritize mobile players for the best chance of success.

In this age of mobile web apps, casinos don’t necessarily need to create downloadable apps. Mobile websites work well enough. They can support popular games and payment apps without requiring native apps.

Although casinos need to prioritize mobile casino players, the bigger focus should be placed on customer satisfaction. Creating a mobile casino is simple. Creating a brand that encourages loyalty is more difficult.

The best casinos in India foster loyalty through bonuses, high-payout games, and fast payouts. They have intuitive websites and use advanced security measures for data safety.

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