Illegal Betting and Gambling Activity Rising in India: What You Need to Know
Are you interested in the cryptocurrency market in India and how the rise of illegal betting and gambling activities is impacting the industry? Stay informed with the latest insights and stats. Read on to find out how inadequate legal framework, selective banning, and high taxation on legitimate gaming platforms are fueling illegal activities in India.
The Growing Issue of Illegal Betting
- New study reveals that illegal betting and gambling activity in India is expected to grow by 30% in the coming years
- Despite regulatory restrictions, the illegal betting market receives an estimated $100 billion per annum in deposits
- Market grew at 7% CAGR from 2012 to 2018 and is expected to grow at an annual rate of 30% in the coming years
In India, the existing legal framework for online gaming is inadequate, providing a conducive environment for illicit gambling and betting entities to thrive. This has led to illegal operators taking advantage of the new tax regime, deceiving consumers into participation on their platform by promising tax exemptions.
Impact of New Tax Regime
- New tax regime levies 28% tax on deposits on legitimate gaming platforms
- Illegal operators exploit tax loopholes to attract consumers with promises of GST exemptions
Online gaming companies registered under the new GST regime have contributed significantly in the October-December quarter, with estimates reaching INR 3,500 crores. The central government is anticipating a collection of up to INR 14,000 crores in GST from this sector in the upcoming financial year, making it a significant revenue contributor.
Challenges in Banning Offshore Betting Websites
- Technology Ministry’s efforts to ban offshore betting websites have proved ineffective
- Illegal operators resurface through new web domains, circumventing existing bans
The piecemeal strategy of periodic blocking orders under Section 69A of the IT Act has not been successful in achieving the desired outcomes. Additionally, state-level bans on legitimate skill-based gaming have further compounded the issue, leading to a surge in illegal online gambling activities.
Proposed Solutions
- Constitute a dedicated task force to tackle illegal operators, both offshore and domestic
- Create a ‘Whitelist’ comprising companies offering games of skill to regulate payment gateways, hosting providers, and internet service providers
CKS suggests that India needs to address the rise of illegal betting and gambling activities by implementing stricter regulations and enforcement measures. By establishing a task force and whitelist, the government can effectively combat illegal operators and protect consumers from deceptive practices.
The Future of India’s Gaming Industry
- India hosts around 1330 homegrown gaming startups generating revenue of $2.8 billion
- Projected to grow at a CAGR of 21% to over $7 billion by 2026
- Pay-to-Play gaming expected to command 83% revenue share
Forecasts indicate that AI and online gaming could significantly contribute to India’s GDP, with projections suggesting a potential $300 billion contribution by FY 2026-27. As the gaming industry continues to evolve, it is essential to address the challenges posed by illegal betting and gambling activities to ensure a sustainable and thriving ecosystem.
Hot Take: Take Action Against Illegal Betting and Gambling
As a crypto enthusiast interested in the Indian market, it’s crucial to stay informed about the rise of illegal betting and gambling activities impacting the industry. By addressing regulatory gaps, enforcing stricter measures, and collaborating with stakeholders, India can effectively combat illegal operators and safeguard the integrity of the gaming industry. Stay updated on the latest developments to protect your investments and promote a safe and transparent gaming ecosystem in India.
By
By
By
By
By
By