India’s gaming market is the second-largest globally, projected to grow from $3.1 billion in FY23 to $7.5 billion by FY28. The online gaming sector is crucial to India’s goal of becoming a trillion-dollar digital economy by 2035.
However, the introduction of a 28% GST on online gambling in October 2023 led several major iGaming operators to exit the Indian market. In addition, online gambling regulations in India vary by state. Most regions strictly prohibit online gambling, while a few adopt a more lenient stance.
Despite clear prohibitions, illegal betting apps continue to market their products, particularly during events like the IPL and general elections. One of the main cause is probably because no federal laws explicitly ban online gambling at iGaming sites.
Consequently, players can still access online sports betting, poker, bingo, lottery sites, and online casinos. Many players use proxy servers or VPNs to bypass restrictions and access blocked iGaming sites. Players usually flock to offshore sites where heavy GST taxes are not applied.
These operators, offering “offshore” gambling services, are not subject to Indian laws, and no Indian players have been prosecuted for using such sites. Some of these platforms are even licensed and regulated by foreign operators outside Indian jurisdiction.
They platforms evade tax laws and pose significant risks, including financial losses for users, tax revenue losses for the government, and harm to legitimate online gaming companies. Some even blatantly advertise their platforms promising “no GST” or “no TDS”. The Indian government lost an estimated Rs 2 lakh crore in tax revenue during the 2023 World Cup due to these illegal activities.
The government has blocked 174 illegal betting apps so far and issued advisories against their advertisement. However, these illegal platforms keep on popping like endless waves.
Aggressive crackdown
The rise of online gaming poses risks like addiction, financial loss, and cyberbullying. The Consumer Affairs Ministry, along with Bengaluru’s National Institute of Mental Health and Neurosciences (Nimhans), is studying these risks to develop guidelines.
Additionally, illegal betting platforms can facilitate money laundering and terror financing, posing a threat to national security.
The consumer affairs ministry is currently targeting indirect and surrogate advertisements for illegal betting and gambling. The Centre seeks a crackdown as these ads violate the Central Consumer Protection Authority (CCPA) guidelines.
The consumer affairs ministry has also asked the Ministry of Electronics and Information Technology (MeitY) to identify violators and take legal action, including imposing penalties and banning betting and gambling apps. MeitY will review compliance issues with gaming apps and prepare a list of violators.
The ministry is working on establishing an independent regulator for online gaming to permit only registered entities to offer e-gaming services in India. This approach seems to aim to replace the idea of a self-regulatory body.
Union Minister Rajeev Chandrasekhar emphasized creating an open, safe, trusted, and accountable internet for India’s digital citizens. A national registry of compliant online gaming intermediaries would be a step towards this vision, helping to prevent financial and psychological distress for users and losses for the government. This registry would complement broader efforts to regulate the digital economy and combat illegal activities.
A centralized registration process could enhance consumer protection by creating a database of compliant online gaming intermediaries. This would help authorities enforce laws and protect consumers more effectively.
A registration process would improve transparency and accountability, aiding various ministries in cracking down on illegal activities and ensuring tax compliance. It would also help consumers avoid dubious websites, contributing to a safer digital environment.
Heading toward clearer legal framework
A standardized gambling law covering all online gambling activities across India is still years away. The government faces numerous challenges and considerations in establishing a comprehensive legal framework and licensing system.
The current legal ambiguity affects both players and operators, with issues such as payment processing hurdles and a lack of safer gambling tools, increasing the risk of addictive gambling patterns among vulnerable players. Until a uniform law is passed, foreign and domestic operators looking to offer legally sanctioned online gambling in India must navigate a complex regulatory landscape.
To find trusted Indian online sports betting and Crypto Casino websites, check the reviews and licenses of verified iGaming sites. Good sites should have plenty of options to choose from, such as robust betting market or a wide variety of live table games to choose from. These games should come with competitive betting odds and high payout rates.
These sites should also offer benefits such as secure transactions in Indian rupees or any preferred cryptocurrency, welcome bonuses with low wagering requirements, plus fast deposits and withdrawals.
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