Widespread unregulated betting triggers India’s fall in global optimum market assessment report

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Be it poker, rummy or fantasy sports, when it comes to India’s online real money gaming (RMG) market, the aspect of ‘betting‘ always creates a stir. This is mainly due to the misconceptions around the sector stemming from the lack clarity around legal frameworks and absence of structured processes. This reality has now been highlighted by the International Betting Integrity Association (IBIA) in its report titled ‘An Optimum Betting Market’.

The report has relegated India to the bottom tier with nine points (out of 100) after taking into account some crucial parameters – underdeveloped regulation (scored three points), taxation (scored two points), product (scored two points), integrity (scored one point), advertising (scored one point) –  in the optimum market assessment.

The research was conducted by H2 Gambling Capital on behalf of the IBIA across 20 countries that have adopted different regulatory and licensing models for gambling and betting. According to the report, the global regulated betting market generated around $74 bn in gross revenue (from $490 bn of turnover) in 2019 and is forecast to reach $106 bn (from $770bn of turnover) by 2025.

The report concluded that 5 factors – regulation, taxation, product, integrity, and advertising – are essential in an environment in order for the gambling and betting businesses to sustain and grow. These parameters have been considered cornerstones of a successful regulatory market structure for land-based and online (interactive/remote) betting.

Britain topped the charts with a whooping 91 points followed by Malta with 88 points, Denmark with 86 points, Nevada with 85 points, Sweden with 83 points and New Jersey with 82 points.

Reasons behind India scoring the lowest 

One of the main reasons for India’s poor score is the widespread betting across the country, which falls under the unlicensed and unregulated zone, resulting in the absence of player protection and market oversight. Another side effect of such an environment is that fiscal returns can’t be measured accurately and thus related criminality continues to flourish.

This study utilized an extensive collection of global regulated betting operator markets and alert data from operators representing $137 bn of global betting turnover per annum. India’s betting is practiced under the shadows, which means it cannot be accurately sized up. However, industry estimates consider that number to be over $100 bn.

“The prohibition of betting in India is widely seen to have been ineffective and, in that situation, reports such the Supreme Court Committee on Reforms in Cricket in 2015, Law Commission of India’s report in 2018 and recent judicial judgments have understandably recommended that betting should be regulated and taxed. However, the federal government has yet to take any action on the issue and social concerns have conversely led some states to specifically ban online gambling. Regulation and market oversight, notably consumer protection, therefore remains absent across much of India, although illegal betting is widespread (reportedly worth more than $100billion per annum). This has allowed related criminal activity the opportunity to flourish and continues to occupy the time of law enforcement bodies,” the report said.

99.96% of the 650,000 sports offered in regulated markets had no integrity issues, the report cited. In India, however, unregulated betting leads to a chain reaction of integrity issues and a lack of national policy makes matters worse, causing unceremonious events like match-fixing in cricket and a further inability of law enforcement agencies to prosecute the guilty due to weak legal frameworks.

Confusion around the Indian gambling and betting law

In a sense, gambling is a state subject in India. However, there also exists the Public Gambling Act of 1867, a central law, which prohibits running or being in charge of a public gambling house.

While some states have adopted it as the primary law, there is a section that believes it is an outdated law and does not factor in the current landscape. There is a growing belief that the Public Gambling Act of 1867 was created much before online betting became a reality in the country. The differing thoughts on the matter is what has led to an intense debate on the legalities of online betting in India.

This has resulted in some states creating restrictive laws around the subject, while others have been more flexible. While states like Telangana, Andhra Pradesh, Tamil Nadu and Kerala have termed online betting as illegal, there are the likes of Goa, Daman and Sikkim that have allowed casinos to function.

This ambiguity can only be tackled if the union government rolls out proper written guidelines to bring regulation defined across law, taxation, integrity, product and advertisement.