The online gaming business in India is expanding at a breakneck pace. The sector is expected to be worth $900 million by 2021. However, predictions show that its worth will skyrocket to a whopping $112 billion by 2025. This would imply that present internet gaming rules, particularly for online gambling operations, need to be overhauled.
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The growing interest in online gaming in India has been linked to a variety of causes, including having one of the world's youngest populations. When youth and online gaming usually go hand in hand, it's simple to see why the country is becoming a gaming hotspot. Other factors contributing to the rise in gaming include extensive internet access and over 750 million inhabitants possessing mobile phones.
Online casinos in India
The online gambling business is one of the more prominent pieces of the online gaming pie. One reason for this is accessibility, but another is because game makers are now producing casino games that combine classic games with Indian culture. For example, some of the finest sites provide a Hindi version of the popular roulette game, while local Rummy games are being revolutionized online, making certain games more enticing than ever before.
But, is online gambling even legal?
There is no clear answer as to whether internet gambling is allowed in India; it is a bit of a murky area. Because the country is divided into 27 independent states, each having authority over its own online gambling legislation, various restrictions apply throughout the country. There is sometimes a difference made between games of chance and games of skill.
Three pieces of law control internet gambling on a national level, despite the fact that some of them were drafted before online casino websites existed. They were enacted in 1867, 1955, and 2000, respectively.
The Public Gaming Act of 1867 made gambling illegal, despite the fact that the internet had not yet been developed at the time. Whereas the Prize Competition Act of 1955 stipulates that competitions are illegal if the rewards exceed a prize fund of 1,000 rupees each month. The Information Technology Act of 2000, on the other hand, does not expressly say that internet gambling is banned.
Online gambling regulations overhaul needed
The existing state of affairs in terms of internet gambling regulation is deemed hazardous to the Indian economy. The country obviously has a booming internet gambling sector, and local casino sites may produce significant tax revenue for the country. Legalizing internet casinos would also result in hundreds, if not thousands, of new employment — and additional tax revenue for the government.
At the same time, it will deter Indian residents and citizens from playing at illegal casino sites or underground casinos, where there are more dangers to their safety and money. Furthermore, it would prevent them from being drawn to legal offshore casinos, which contribute to the success of other countries with strong gambling sectors. In a nutshell, India may be overlooking an opportunity in its own backyard.
Bad regulations could play spoilsport
In India, there are several forms of online gaming, such as e-sports, online fantasy sports, online skill-based casual games, and sports (the likes of carrom, chess, billiards, ludo, scrabble, Sudoku, quiz and so on, apart from few types of card-based games). Many of them are primarily skill-based, while others may be made such by making appropriate adjustments to forms.
Despite several court judgments, certain state governments have ended up outlawing them while pursuing internet gaming and betting. Karnataka, which has a reputation for being a startup and business-friendly state, has just joined this bandwagon, but the sector is hoping that the state government would give the required clarifications and guidelines that will provide them with much-needed respite.
Another area in which this sector needs clarification is GST. In 2019, the GST Council agreed to form a Group of Ministers (GoM) to deliberate on GST on casinos, racetracks, and internet gambling, once again referring to all of these in the same sentence. The GoM was established in 2021 to develop recommendations for determining tax rates and the application of GST.
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