SBC News Voice of the Sports Betting Industry
Another layer was added to the debate around gambling regulation in India this week with a fiery Supreme Court hearing, according to local media reports.
The Hindu reports that the Supreme Court heard the gaming industry’s case on Monday 5 May regarding the Good and Services Tax (GST), a flat tax imposed on all products and services.
The way the tax is applied to gambling has been controversial since its introduction back in 2017, however. This is mainly because the flat tax does not differentiate between different types of gaming – namely the difference between a game of skill and a game of chance.
In many markets, the term games of skill often includes sports betting, which by using knowledge of a sport and logic could be considered a game of skill, or card games like poker and blackjack which depend upon mathematical knowledge and playing ability.
In contrast, games of chance are ones like roulette or slot games where the outcome cannot be determined by a person’s ability, it is all purely down to chance. In India, the application of the GST tax to gambling does not consider either definition, and reform advocates argue this should be changed.
Opponents of this view argue that regardless of whether a game relies solely upon chance or on an element of skill does not change the fact that when a wager is placed on it, it counts as a form of gambling.
The government’s representative at the Supreme Court, Solicitor General N. Venkataraman summarised its view, as reported by The Hindu. He said: “Then it will become gambling, in spite of being a game of skill… Betting on a game of skill is statutorily considered gambling.”
Why does this matter?
Gambling regulation in India is a heavily fragmented landscape. There is no national betting and gaming market, with different states and territories often having very different approaches to the sector.
Some states do explicitly outlaw betting and the Public Gambling Act of 1867 prohibits public gaming establishments. The government has previously hinted at a desire of replacing the Act with more updated legislation fit for the 21st Century, but so far this hasn’t materialised.
Meanwhile, three Indian states, Goa, Daman, and Sikkim, allow both casinos and online gaming. Horse racing betting is also permitted in many areas, though usually restricted to racetracks like the Calcutta Turf Club.
The reason the Supreme Court debate matters is because, as stated above, the government has hinted at a desire for modernisation. Some state governments are interred also, with the government of Karnataka seemingly looking to join Goa, Daman, and Sikkim in launching a market.
Gangadharaiah Parameshwara, the state’s Home Minister, told local media last month that he is drafting a law to regulate betting in the state and has also commissioned a committee of industry representatives to examine how a framework could work.
India is also an increasingly lucrative market for some major overseas firms. In its Q1 trading update published this week, Flutter Entertainment revealed that its Indian iGaming revenue – presumably coming from the three states mentioned above – was up 45% year-over-year.
India’s economy has been enjoying rapid growth in recent years, now the fourth largest in the world by GDP. It is also home to a very passionate sports fanbase, particularly around the Indian Premier League (IPL), one of the most valuable sports leagues in the world.
These factors combined make it a market with strong growth potential for the industry, perhaps in a way which mirrors the industry’s new crown jewell of Brazil, should government attitudes liberalise.
