Jai Sinned: Torpedoed By Taxes Betway, bet365 Exit India
By most metrics, India–the most populous nation on earth, the financial mainstay of world cricket and inventor of chess, the mother of games, so complex and compelling it’s called a sport–should be a powerhouse of the betting industry.
But its opaque legislation and new swingeing taxes–seemingly targeted at the coming off-shore operators–has now done for two titans of the world iGaming scene – Betway, owned by Guernsey-headquartered Super Group, and bet365, who need little introduction.
Betway–no stranger to controversy–they were fined a then-record £11.6 million for anti-money laundering failures in March, 2020–confirmed on Monday that they had pulled out of the potentially vast India iGaming market with immediate effect.
Bet365, for their part, have effectively been inactive in India since this July, when the country’s Information and Technology Act 2000 was amended, hiking betting taxes from 18 to 28 percent tax on off-shore gaming sites.
And, most prejudicial of all, applied retroactively.
Moreover, some Indian states, Andhra Pradesh, Telangana and Tamil Nadu, among them, have also declared online betting as a punishable offence, further complicating an already labyrinthine gambling regulatory eco system.
“The newly-effective tax rules make the Indian market no longer commercially viable for Super Group,” said the New York Stock Exchange-listed operator in a statement.
Affirmed Super Group CEO Neal Menashe:
“We are continuously evaluating evolving regulatory landscapes across the many markets we serve.
“Informed by years of operating our geographically diverse business, we remain confident about the long-term growth opportunities in front of us.”
Super Group, meantime, stands by its previous Full Year 2023 Revenue Guidance of €1.35 billion.
Even though it’s still not technically legal or fully regulated, iGaming has surged significantly in the potentially vast India market over the last five-years
Betway and bet365 were among a clutch of operators–still numbering 1xBet, MostBet, 22Bet and Parimatch–who pioneered the possibilities of legal betting in a country of 1.4 billion people, a nation that, paradoxically, already hosts a vast and hugely sophisticated illegal spot cricket market — perhaps the biggest and richest illicit gambling bazaar in the world, generating billions of dollars, never mind rupees.
Quite content to ignore the underground cricket match-fixing and betting market, India’s state and tax authorities are now chasing fantasy sports and gaming companies for hundreds of millions of dollars in back taxes.
But many Indian iGaming companies have successfully argued in court in recent years that their services are skill-based rather than games-of-chance, and thus exempt from such high taxes; so a stand-off continues.
In September, Dream11, the country’s largest fantasy sports company backed by Tiger Global Management, received a tax demand for approximately INR12 billion (£119.28m/US$144m) for the years 2017 to 2019.
Gameskraft, an iCasino based in India’s software capital, Bengaluru, is also facing a tax demand for hundreds of billions of rupees.
Like its huge Asian neighbour and rival, China, India has a muddled, if not schizophrenic, moral ambiguity on the merits of gambling — or anything deemed gambling.
Left In China’s Wake
But while China, although battling the ever-evolving tactics of POGOs and their ilk, has built a successful “cordon sanitaire” around its gambling entrepôt of Macau, still-democratic India is left with the relatively feeble experiment in Goa, another former Portuguese colony, that hosts a handful of off-shore floating casinos — a mere drop in the ocean compared to the money-making might of Macau, the richest gambling territory in the world.
Referring to the Betway and bet365 retrenchment, a top lawyer at one of India’s leading law firms, which represents venture capitalists and foreign-origin betting firms, told iGamingFuture:
“This was a booming sector. [But] all this rumble-tumble is only going to shake investor confidence.”
For Betway and bet365 what was once hailed as “Jai Hind” has now soured to Jai Sinned.