India has passed a law that has completely banned online gambling. This includes sports betting, casinos, and fantasy sports.
At the end of August, India’s parliament decided to impose an outright ban on the use of online gambling and betting apps. This impact spans a range of platforms, including sportsbooks, casinos, card games, and fantasy sports. Passed by both Houses of Parliament, it outlaws the offering, promotions, and financing of these games.
What Does the Law Cover?
India is one country that has really taken to fantasy sports apps, particularly when it comes to cricket. This will cause an immediate major problem with the national side’s cricket team, who use a prominent fantasy sports app as its major shirt sponsor.
So far, the Board of Control for Cricket in India has made no statement on the impact of the law on this particular sponsor. However, a broader comment was made by BCCI secretary Devajit Saikia, who added that “If it’s not permissible, we’ll not do anything, the BCCI will follow every policy of the country that is framed by the central government.”
Many of the games outlawed stayed online for some time after this, as a formal ratification took place. The move was said to be in response to evidence that suggested gambling companies had taken around $2.3bn every year from 450 million people.
What Lessons Can Be Learned?
There has been an increasingly complex regulatory atmosphere in India since May 2023. At this point, it followed a similar path and banned all outlets, only to later reverse the decision after legal action took place. However, the damage was already done, with many established global companies leaving the market. Since 2023, a tax of 28% has been applied to online gaming bets.
One of these companies was Betway, a company that has operations in many strictly regulated environments such as the UK, Europe, the United States, and emerging markets like Argentina and Africa. You can download Betway app and look at common themes across the best online casinos in regulated territories: a wide selection of markets and games, safer gambling protocols, and excellent customer support. This brings up the first lesson that can be learned: A consistent regulatory environment attracts the best providers.
It is not just India that has seen this drought of quality services. Poland has had similar issues, with many major brands leaving the country. This has been due to a state monopoly on gambling, which has seen laws on gambling chop and change erratically as casinos try to operate in a grey legal area.
The Move to Offshore
What many of the regulated countries these well-known operators work in understand is that a total ban and regulations that stifle competition send people offshore to unregulated markets. This damages the country in many ways. Firstly, there are no safe gambling responsibilities or oversight with these operators. Secondly, the $3.8 billion sports betting market is no longer paying tax to the Indian government. All of that revenue is offshore.
It is likely India will see consumers shift to the offshore cryptobetting market. Many of these websites don’t even require age verification, and with 100 million crypto wallets in the country, people can make transactions much easier and faster.
This also plays into the hands of something the government was quite eager to crack down on: Money laundering. The top providers that have now exited the country are regulated in other jurisdictions due to their financial transparency. Offshore accounts can now be used to move money in and out of the country easily without the use of traditional financial institutions.
Could There Be Benefits?
There are some who may benefit from the ban on gambling apps and online platforms. Physical casinos are still allowed to operate, and the result may be an increase in footfall in those. States such as Goa and Sikkim have these, and domestic tourism could be boosted as a result.
The fallout may not seem as drastic as it sounds, either. Many states had already enacted their own bans before this. This included Odisha, Assam, Andhra Pradesh, and Telangana.
The problem many have with the law is that it does not distinguish between games of skill and games of chance, instead banning both. The first are ones that need a degree of knowledge, perhaps like poker or fantasy sports. The second are based on luck alone, like roulette and slots. This has led to some industries, such as the esports sector, filing separate rulings for classification, which has cemented their position as a non-gambling game of skill. While this takes betting on esports off the table, it has resulted in possible future investment in the sector.
The penalties for flouting these laws are tough. A jail term of three years and a fine of 10 million rupees can be handed to anyone offering or enabling these services. Marketing and promoting them has a separate sentence which can be up to 5 million rupees and a jail term of two years. However, these will be increasingly hard to enforce with offshore providers, and India may soon find itself in a worse position than ever before.
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