New overseas investment regime prohibits Indians from investing in foreign gambling ventures

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In August, the Central Government has come up with a new overseas direct investment (ODI) regime with a view to liberalise the investment requirements by Indian entities in overseas ventures.

The guidelines bring a system of self-regulation with the evolving business and economic requirements. The regime is welcomed by business houses as a much needed regulatory move.

For gaming community, notably, the new regime imposes a prohibition on investing in overseas gambling ventures by the Indian residents.

Under the old regulations, this prohibition was limited to investments in real estate activity and dealing with financial products linked to the Indian rupee.

With number of offshore gambling portals mushrooming in recent times, the government appears to have targeted the investment sources of these illegal websites under the new ODI regime. However, with the shady structuring and money routing techniques followed by these entities, the prohibition may have a limited impact. The new prohibition may at best prevent established business houses from undertaking gambling activity overseas.

On the other hand, the government has issued a second advisory this month to broadcasters and digital media to refrain from promoting gambling related ads.

For domestic skill gaming sector, the government in June informed the Parliament that it is working to evolve a possible regulatory roadmap to promote online gaming business in India.

Minister Rajeev Chandrasekhar said his ministry has been interacting with the online gaming platforms and other stakeholders to evolve possible roadmap of regulation so as to promote ease of doing business and to provide suitable eco-system for the domestic platforms.

Noting that the sector had the potential to become the torchbearer of “Create in India” and “Brand India”, the government said that online gaming as an industry is evolving and has expanded across horizons.