The concept of gambling hasn’t been a new one for the Indian audience. Whether it is playing card games during Diwali to appease the Goddess of Wealth Lakshmi, or putting money in IPL online betting, the appetite for gambling – sports and casino games, is big among the Indians, and players enjoy betting on the cricket odds at various websites. So big that even the obscure, murky laws around gambling in India soon will be having any effect on the amount of betting.
It’s a well-known fact that India is a cricket-loving country which also leads to an increase in the people being interested in online betting as well. With a lot of people being exposed to the internet, cricket betting offers a unique opportunity for online bookmakers to make a huge customer base. Despite these vast numbers of internet users, there is a lack of awareness when it comes to cricket betting and the onus for the same is on various online bookmakers out there.
Whether it is a game of chance or skill, whether it is cricket betting, football betting, or just playing poker online, Indian fans always find a way of doing it and they are doing it full-fledged. And here’s the kicker – none of the actions are regulated. There are no dedicated laws or an established framework that can control India’s online gambling activity. It is widely unregulated and a majority of it is underground.
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While this is definitely terrific for Indian bookmakers who get a chance to make some money and grow their wealth, but it is also a huge opportunity for the government and authorities in terms of taxation. The massive financial betting bubble can also have a subtle, indirect impact on India’s GDP. Let us have a look at it.
If we are to go by a March 2019 report published by KPMG on sports gaming in India, then the market capitalization of the sports betting market in India more than 130 billion and it was the case only a few years ago. By now, it is expected that the same number is upwards of ₹15 lakh crores.
Some reports also estimate that in 2016, India’s turnover from betting and gambling was approximately 7.5% of its GDP. If we analyze those numbers in terms of taxation, a flat 30% tax on any gambling winnings could potentially translate into lakhs of crore for the government to put to good use. Imagine having that kind of a fallback during times when the coronavirus pandemic affected the country’s revenue on all fronts.
But that’s not all – by legalising and taxing sports betting and gambling, the government will also be able to control the illegal, unregulated markets and bring them in the structured fold where their interests and information are protected and respected. Moreover, regulating the same can also help in controlling black money, money laundering, and reducing corruption in sports. And not to mention the increased viewership in the sporting events once it becomes legal to bet.
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The legalization of sports betting can create a ripple effect that will benefit the broadcasters, sporting franchises and tournaments, and even the fans. Currently, there are taxation laws on gambling winnings, which puts it flat at 31.2% including cess. However, because of the fact that there is no corresponding legal framework, it may be hard to realise the full potential here. India can definitely take cues from countries like the UK, Australia, and Italy, where betting is involuntarily linked to their respective GDPs.
Having a structured, well-planned legal framework to regulate online gambling has helped these governments improve their tax revenues and protect consumers’ interest in the process. India is already halfway there, thanks to the stringent KYC measures levied by the betting sites. It is now up to the authorities to pave the way forward.
