Overview of India’s fledgeling iGaming sector

25 October 2022
The Indian online gambling industry has grown significantly over the last few years, and current estimates suggest it is worth in the region of $1.8 billion. This is set to rise to more than $5 billion by 2025, signifying an impressive growth rate. This increase has been partly due to the pandemic but is also fueled by increased access to the internet and smartphones and more disposable income amongst citizens.
India is the second largest country in the world.

India is the second largest country in the world. (photo by Rawpixel)

Let us not forget that India is also the second-largest country in the world, with a population of over 1.3 billion. Its middle class is becoming more mobile, and younger generations, in particular, are looking toward the digital realm for entertainment. This, combined with growing acceptance by authorities in terms of online gambling, means the sector’s growth is almost guaranteed.
This and more means India is fast becoming an area of interest for online casino companies and iGaming entrepreneurs.
Regulatory uncertainty
While the sector shows promising growth, there are issues with continued regulatory uncertainty, mainly at the state level. Some states changed their laws to ban gaming activities, but some were overturned as unconstitutional. In other cases, conditions took a different approach, regulating the sector and issuing licenses.
In October 2021, the State of Karnataka introduced an amendment to the police act, effectively prohibiting online gambling, including games of skill. This was a big blow to the sector leading several operators to challenge it in the High Court. They argued that the amendment was unconstitutional in banning games of skill as these are protected under other laws. They also noted that another state’s court had recently overturned another similar ruling on the basis that it was unconstitutional. The High Court found in favour of the companies, but the matter will now be referred to the Supreme Court.
Meanwhile, the state of Meghalaya introduced the Regulation of Gaming Act which provides a licensing framework for operators along with the Regulation of Gaming Rules. This legislation lays down the eligibility criteria for licensees, the process, requirements, fees, and other rules related to the sector. It also appoints a commission to oversee licensing and guides players and dispute resolution.
While this is a set in the right direction, the rules currently only provide for applicants to be Indian citizens or companies. In the case of a company, the controlling stake must be in India, and all executive decisions should be made in the territory.
In other related news, the GST Council which comprises ministers with oversight of gambling, casino, racecourses and the online sphere. They are examining the value of services provided by casinos in terms of taxable revenue and lottery and sports betting and make recommendations based on this.
What does this mean?
Regulatory matters apply mainly to online gambling companies operating within the country. As for those based elsewhere that offer services to Indian clients, it is a lot more straightforward.
A growing number of online gambling entrepreneurs are keen to enter the online casino market and offer products to the Indian market. As mentioned, the size of the market is enormous, and there is a growing number of ready and able players wanting to bet. This provides ample opportunity for operators who want to expand their existing base or branch out into a new region completely.
It is entirely possible to start a gambling company in Kahnawake or Malta and offer your services to Indian players. In fact, this is a great way to enjoy access to the market while being based in a reputable jurisdiction. It also allows you to work in various other emerging markets, including South America and Asia, to name just two.
Meanwhile, stakeholders in-country are hopeful the situation will become clearer sooner. With a thriving tech sector and millions of technology-savvy young workers, it is the perfect place for companies registered elsewhere to consider a branch.
“We firmly believe that there is a need for central regulation. An overarching central body that would regulate the e-gaming sector would have clearly defined rules and regulations,” Sameer Barde, CEO of E-Gaming Federation, told Business Standard, as just one example of a stakeholder with high hopes.
Fast Offshore
We do not offer corporate services in India, but we do work with customers who serve the Indian market. At Fast Offshore, we are committed to our client's success, and helping them get set up to offer products in the world's leading and emerging markets is part of that. We offer a portfolio of services developed over 10 years. This includes incorporation, structuring, payments, licensing, and even compliance. Once you are set up, we can also help you with maintenance on an ongoing basis. To find out more about getting started, contact us today.

Ron Mendelson

Ron Mendelson is the Director of Costa-Rica based business and financial consultancy firm, Fast Offshore. With over two decades of experience in corporate services, iGaming, international business, finance, licensing and legal matters, he advises a number of international clients on their business needs in the Americas, Europe, and beyond.