As the popularity of online gambling continues to explode, not just in India above all mobile, but also globally – amid the ongoing coronavirus lockdowns, an important question remains: when is the right time to regulate the industry?

Regulation, market surveillance “absent” in India: study

A new search carried out by H2 Gambling Capital on behalf of the International Betting Integrity Association (IBIA) placed 20 jurisdictions with different regulatory and licensing models, judging them on the basis of five key criteria: unlimited license, competitive GGR tax, broad offering of product, integrity and balance provisions, parameters and point allocation out of 100. India and Australia are the only jurisdictions examined among the Asia-Pacific markets, and the study finds that India is at the top of the list. bottom of the list with just nine out of 100 points.

“Regulation and market surveillance, including consumer protection, therefore remain absent in much of India,” according to the study. “This has allowed related criminal activity to flourish and continues to occupy law enforcement time.”

Seven Jackpots analysts echo the same sentiment. In their latest research, aptly titled “When should an industry regulate“, the researchers point out how” the country’s total regulatory uncertainty makes planning and investing difficult. ”

For the law firm Touchstone Partners, there is hope for the industry. The law firm is currently examining the online gambling legal landscape in India in partnership with ENV Media, and sees the opportunities that the rapidly growing market can offer.

“We hope that India’s regulatory framework will be changed to encourage further participation, not least because as a country we have a lot to gain from the regulation of activities such as gambling and betting,” said Uday Walia, partner at Touchstone Partners.

Regulation addresses unresolved tax issues

“A regulated market is better than a market operating illegally”, according to the SevenJackpots study.

By regulating the gambling market, the government guarantees consumer protection, which can ultimately lead to great things for the country, including tax collection.

The fiscal situation in India remains largely uncertain. The requirements and categories of the tax system are based on the obsolete Public Gaming Act of 1867, with a number of legislative acts serving as other bases for the taxation of gambling in India. There is also section 115BB of the Income Tax Act 1961 which states that all winnings from lotteries, crossword puzzles, betting on races, card games like Andar Bahar, Teen Patti , online rummy and other games, as well as gambling or betting of any kind or form has a flat rate of 30% tax.

Then there is the standardized goods and services tax (GST), which imposes a tax rate of 28% on all events and entertainment services, including casinos and racetracks, and their related services. Recently, however, the government convened a group of ministers (GoM) to “consider the issue of valuing the services provided by casinos, racetracks and online gaming portals like Purewin and the taxation of certain transactions in a casino, with reference to the current legal provisions and court orders.

With an Indian betting market estimated at INR 9.50,000 crore and online gambling estimated at INR 20,500 crore, it is undeniable that transparent regulation will bring benefits to India’s coffers.

As the SevenJackpots report points out, “Examples of effective gambling regulation are easy to find: licensing, taxation and supervision come first. Corruption and lobbying must be eradicated through precise legal definitions, thus raising the standards of consumer protection. “



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