Bans, prohibitions and criminalization have been the most common answers given by Indian central or state authorities to any pragmatic, social, or ethical problem related to real money gaming ever since the Public Gaming Act was adopted by the British rule in 1867. While the restrictive approach is proving more and more ineffective to solve any associated issues in the information age, and can even produce a reverse effect, regulation of real money games is capable of ensuring player safety, protection of vulnerable gamblers, a healthy business climate and a substantial increase in tax revenue collection.
Studies have shown that the total yearly value of gambling and betting activities in India reached $130 billion (roughly ₹9.5 lakh crore) in 2018 after having expanded at a compound annual growth rate (CAGR) of 7 percent since 2012. Assuming this pace has been preserved, the 2022 size of the market can be taken as $170 billion or approximately ₹13 lakh crore.
Online gaming has been assessed to be just a small fraction of less than 2 percent of the country’s whole betting and gambling market with its 2020 size valued at $2.8 billion or ₹22,500 crore. Nevertheless, the online segment has been growing at an impressive rate nearing 40 percent every year.
Clearly, legal prohibitions and state-level blanket bans on gaming have failed to eliminate or even reduce the scale of gambling and betting in India. Even if not getting struck down by a court order like the all-gaming bans in Kerala, Karnataka and Tamil Nadu, such measures cannot stop citizens from accessing any Paytm casino of their liking or going to a back-alley bookie.
What’s worse, bans push gaming activities to go underground, where the potential for risks and harms is far greater. Protection against fraud and cheating is nonexistent, gamblers prone to addiction are welcomed and taken as prey, and debt collection methods can quickly escalate an already desperate situation. Legitimate businesses are deprived of profits, and instead of tax collection and welfare, money flows to criminal hands.
A Change of Approach is Necessary
All this necessitates a change of approach from simple attempts to prohibit real money gaming to a more complex effort to regulate such activities and have them follow sensible rules. There are a number of signs that this idea has entered the Indian political agenda, but there is still a long way to go before the nation can effectively join the increasing number of countries around the world that have already regulated their gaming space for similar reasons.
Recommendations to regulate and tax betting and gambling were issued by the Committee on Reforms in Cricket in 2015 and the Law Commission of India in 2018, and were worded in the Rajya Sabha in December 2021. Numerous High Court and Supreme Court benches have also suggested that regulation is the reasonable way forward.
Two separate bills to regulate gambling have been proposed in the lower house of parliament, the first one - the Sports (Online Gaming and Prevention of Fraud) Bill, 2018, lapsed with the dissolution of the 16th Lok Sabha. The second one - the Online Gaming (Regulation) Bill, 2022, is still an active proposal. Despite having a number of flaws as per experts’ opinion, the introduction of this draft shows the growing awareness in India’s political class about the benefits of gaming regulation on the central level and the dangers of leaving these activities unregulated.
The Global Best Practices in Gaming Regulation
Another positive development that India made was the setting up of an inter-ministerial panel mandated to examine global best practices in the field and to propose a broad legal framework to regulate gaming in the country.
The common traits of the gaming legislations in many countries like Sweden, Denmark, the UK, Germany, and others, is the formation of a national gaming regulatory authority, the introduction of a licensing regime, and the focus on player protection and responsible gaming.
Modern-era gaming regulations have been designed to shield players from the whole range of associated risks, starting from fraud and unfair play, moving on to addictions and other mental health issues, and reaching financial troubles and debt accumulation.
This is done through a comprehensive system of rules and restrictions, as well as obligations for operators to identify and protect problem gamblers and to provide responsible gaming tools and support mechanisms to users.
The other important benefits of regulating gambling include ensuring a healthy and predictable business climate to companies and investors, job creation, and substantial increases in tax collection and welfare-producing capabilities of the government.