India’s iGaming Eastern Promise

Once touted as the fastest growing economy in the world, India has taken a massive financial hit because of the impact of the coronavirus Covid-19 pandemic. But nascent online gaming in the country is promising to ameliorate the heavy fiscal downturn with a boom that could be worth US$2-billion by 2022.

According to leading Cloud accounting firm Google-KMPG, India–with its predominantly youthful, sports-mad, population–has a potentially lucrative base of more than 628 million punters.

It’s the new online gaming frontier and for those in the know the fabled land of IPL cricket (Indian Premier League)–the third richest sports league in the world—is, beyond doubt, red hot right now.

While India’s traditional industries and businesses have taken a beating because of national and international lockdowns, there’s been a major uptick in punters turning online to kill boredom and explore new sporting frontiers.

“During Covid the Indian gaming industry has seen a terrific surge in its business,” said Ranjana Adhikari, co-head of media entertainment & gaming at international law firm Nishith Desai Associates.

“The online gaming industry is expected to reach revenue of $US2-billion by 2022. We also saw a 24 per cent increase in traffic in online gaming between February and March. Lockdown has seen an acceleration of people moving to online in general,” she said.

India’s lush online ecosystem is not only blessed with volume and youth but also the brilliance of local computer coders, game developers and designers. This, after all, is the country that invented chess.

Online game development companies in India, for example, have grown more than tenfold from only 25 in 2010 to 275 in 2019.

After China, India is the second largest online market in the world; with over 560 million Internet users, or around half its population. This number is set to increase by a further 100 million by 2023.

Most significantly, the perfect combo of urbanization, youth and widespread smartphone use makes an online gambling boom all the more plausible. It’s estimated that 60 per cent of the country’s gamers are aged between 18 to 24-years-old.

Major game developers, correspondingly, are focussing on creating games tailored to a young mobile audience. Games such as Indian rummy, teen patti, andar bahar, Texas holdem poker and Omaha poker are particularly popular.

In keeping with a multi-ethnic society, that has 27 major languages, the nation’s online game developers are trying to build appeal across the spectrum.

Companies hold special events celebrating popular Indian festivals, such as Holi, Diwali and Eid.

Fantasy sports in the country are another big runner and could be worth US$5-billion in the next two years.

Fantasy cricket, hardly surprisingly, is by far the most popular and has cornered 85 per cent of the market; followed by football, basketball, and kabbadi, a sophisticated and very physical form of tag.

The eSports Federation of India, meantime, estimates there are 264 million Indian gamers competing for ever-increasing prize money.

It would be naïve, however, to suggest that all is “roll and glow” in the Indian betting scene.

Companies are operating in a complex–and at times prohibitive–regime.

India’s online and offline betting and gambling laws are set differently by each state.

Skill-based games, for instance, are usually permitted under local laws but “games of chance” are prohibited under most so-called Gaming Enactments, which were drafted during the British colonial era and are based on The Public Gambling Act, 1867.

Horse betting and fantasy sports are considered games of skill, while rummy and poker are considered games of skill in some states but outlawed in others.

Most observers concur that this grey zone will have to be clarified and universally codified for gaming’s full potential to be realised in India.

It’s estimated that around 80 per cent of India’s gamblers are thus playing with “play” money and not real money because of this discrepancy.

Indian iGaming expert and former GVC heavy-hitter Anutosh Chatterjee stresses that any potential market entrant needs to fully grasp the political climate and get a top local partner before slapping money on the investment table.

He says: “[There’s] a clear distinction between real money and play money [which] 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.

“A long term approach would be to enter the gaming space and understand the market for when regulation happens, then simply switch over to Real Money Gaming,” adds Chatterjee.

Wise words of caution, no doubt. The pull and potential of India excite but the country, while full of promise, has its own very particular pitfalls.


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