With the Indian iGaming market potentially opening in the next 2 years, many operators are eyeing up what will clearly be a sizeable opportunity.
But what are some of the key considerations operators need to understand before entering this space?
Indian iGaming market consultant, Anutosh Chatterjee, believes having an appreciation for the cultural variations between regions, understanding preferred payment methods and getting a grasp of the political climate, all represent important factors in the due diligence process.
What can operators do to best prepare for regulation of the Indian market?
“A clear distinction between real money and play money defines the current legal space in India.
It becomes complicated when real money gets involved, as ambiguity exists in the online legal space and state laws differ.
Multiple court judgements have different opinions and political decisions are polarised with most having a negative opinion.
A long term approach would be to enter the gaming space and understand the market for when regulation happens, then simply switch over to gambling aka Real Money Gaming.
An alternative is to enter the FRP space, however, this is currently showing diminishing growth returns.
The industry rides on court judgements and states are free to define their own rules, this has resulted in a total ban from multiple big states.
Indian players are notorious for not depositing, and more than 80% are free money players.
Thus, operators need to be passive players in the Indian ecosystem and be aware of the diversity & nuances.
These are very different to established markets and patience is key for this elephant to open up.”
Different regions within India have hugely different customer bases, what advice would you give operators looking to move to the market about how to prepare to offer the best customer experience regionally?
“There is no quick fix.
Vernacular languages, personalization and empathy to local players preferences are basic pillars for success.
The majority of India does speak & understand Hindi and digital content in this language is a basic hygiene factor.
Regional YouTube and Instagram influencers create trust and loyalty.
Awareness of local festivities synced with emotional bondage (which differ locally) are some starting points.
Entry needs to be a long-term play with a consistent and focused grip on all regional customer touchpoints.”
What are the most popular payment systems in India, and does this vary regionally? How popular are mobile and online payments?
“Mobile wallets – Google Pay, Phone pe, Paytm and UPI, are the most preferred.
They are used by approximately 500m smartphone 4G users.
Packed with user-friendly features, simple interfaces and attractive discount offers, they are more secure than carrying actual cash.
Net Banking, debit and credit cards are also popular.
Mobile and internet penetration is ever increasing in India, which paves way for the adoption of more digital payment solutions in the coming years.”
What would the expected GGR tax rate be if and when gaming licenses were to be awarded?
“Personally, I expect this to be on the highest tax bracket of 33% plus; at least initially.
Once the industry matures and we have more players and competition, the rates should come down.
A comparison can be made with land-based casinos in Goa and the North East with online regulation in Sikkim.
Social acceptance is still low for gambling in general and lawmakers need to have a face-saving high tax regime.”
In regard to what types of game will be regulated first, I don’t think there will be a differentiation between specific sections of Real Money Games.
All of them will come together.”
Editor’s Note: From Anutosh’s suggestions, there will be a number of complications when expanding into new territories within India, and each come with their own distinctive customer preference, be it the betting itself, the payment method, or cultural considerations.
To be in a position to take advantage when the market opens, it’s key to research each region and its potential consumers.
Whether it’s creating partnerships or building technology, the ability to maximise the effectiveness of marketing communications will prove paramount in getting an early foothold.