Gaming industry: FDI, legal betting on AIGF agenda

By: | Published: December 10, 2016 6:24 AM

Gaming, betting and lotteries contribute heavily to the development of Sikkim and in fact, it is the only state to allow sports betting in the country under regulation, stated AIGF at a panel discussion held recently in the state on the gaming industry in India.

The All India Gaming Federation (AIGF) is striving to give an impetus to the gaming industry in the country by focussing on policy advocacy, research and regulation, taking the regulatory framework of governing gaming, casinos and betting in Sikkim as an example, which has the most liberal laws for the gaming and betting industry.

Gaming, betting and lotteries contribute heavily to the development of Sikkim and in fact, it is the only state to allow sports betting in the country under regulation, stated AIGF at a panel discussion held recently in the state on the gaming industry in India.

However, since the gaming industry is largely unregulated, those interested in betting have gone underground, with illegal bookies managing affairs. As is inevitable, the hawala system has awakened to these channels and money laundering has also become an inevitable outcome. As per a report of the International Centre for Sport Security (ICSS), the illegal gross betting and gambling market in India is pegged at $150 billion.

AIGF is thus working with state governments and authorities to introduce 26% FDI in the segment and legalise gaming related activities. The key, it states, is to regulate the market and use the money in the development of sports infrastructure across the country and increase tourism which in turn will improve employment opportunities.

Roland Landers, CEO, AIGF said that the not for profit entity is in active talks with other states including Pondicherry, Telangana and Karnataka to legalise gaming and start casinos, as the entity works with regulators to ensure responsible gaming alongside. Besides this, AIGF also claims to have initiated conversation with the government in Maharashtra and West Bengal.

The recent Lodha committee report also suggested that it would serve both the game and economy if betting was legalised as has been done in the United Kingdom. The report mentioned, ‘While it is our recommendation that the legislatures ought to legalise betting in cricket, these must be with the following safeguards: regulatory watchdogs to ensure strict monitoring, licenses would have to be issued to those placing bets as well with penal sanctions on those transgressing the license and transparency from players, administrators and others closely associated with the sport’.

Rajpal Singh, director at FICCI emphasised that it is organising a closed door meeting with the Law Commission to discuss the Lodha recommendations on gaming and betting.

Although the industry has a lot of potential with past reports claiming its worth to be $60-70 billion, a lot of work needs to be done in terms of changing the mindset of the state governments and the archaic laws regarding betting and gaming, as almost 95% of the market is grey.

But demonetisation has had an impact even on the gaming and betting industry, which is generally cash intensive. Stated Manoj Sethi, director of Golden Gaming International, based in Sikkim. “Due to demonetisation, the business has reduced by 45%.” But experts point out it will be a short term impact and in the long run, the black money used by gamers will reduce, bringing liquidity in the market.

The gaming industry in India is presently classified into Casinos, Crossword and prize competitions, betting on horse races in certain race courses, online gambling and betting, physical gaming and betting, rummy (online and offline), poker (online and offline) and Fantasy Sports (online and offline).The government has signed a profit-sharing agreement, under which license-holders would pay 10% of their profits, or R5 crore (to the government), whichever is higher. Winnings would be taxed at 30% as they come under the Income Tax ambit.

(Travel for this report was sponsored by AIGF)

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