INDIA

Sleeping giant needs a regulatory shake

India has often been referred to as Asia’s sleeping giant when it comes to the gambling industry, though on the land-based side at least, it may still take some time to wake up.

Without a doubt it’s potentially an enormous market. Its population tops 1.3 billion and it has one the world’s fastest growing economies, which is expected to propel nearly 80 percent of households into the middle class by 2030, up from about 50 percent today.

Conservative estimates currently put the size of the gambling market at about $60 billion, but just a small fraction of that -- about $200 million -- comes from casinos. The majority of the growth is online, sports betting and lotteries.

Although land-based gaming is legal in three states, the necessary changes in legislation to help the industry take off have been slow to materialise and as of now there is little clarity as to a timeline.

Last year, Goa’s former Chief Minister Manohar Parrikar, who died in March this year, created a buzz with his pledge that legislation would be upcoming to move Goa’s six floating casinos onshore, potentially to an entertainment hub.

Such a move was seen as a game changer for the boats, which allow little room for further expansion. However, since Parrikar’s death, there appears to be no consensus on what to do about the casino ships, which are scheduled to move from their current location on the River Mandovi, near Panaji, by March 2020.

The government is currently examining alternative sites on water, but as yet there is no agreement, while an immediate move to a position on land has not gathered momentum either. One potential location that has often been suggested is the new Mopa airport, which is under construction. However, that is not feasible as work at the already delayed airport has stalled after the Supreme Court suspended its environmental clearance.

Goa Ports Minister Michael Lobo is a strong proponent of moving the casinos on land and in October said that he believed the government should publish its casino policy within the next six months. However, he says that it’s likely to take four to five years after the completion of the airport for the casinos to be relocated.

Land-based gaming is also allowed in Sikkim, though the state is remote and difficult to reach. The government there legalised gaming in 2009 to drive tourism and it now has three casinos, though it has been slow to build. That may now be changing after the opening of a new airport in September last year.

The Union Territory of Daman in theory also permits land-based gaming, although Delta Corp has still not been given permission to operate a casino at its luxury 176-room resort, which opened in 2014. Delta last December filed a writ petition in the Bombay High Court seeking to speed its casino license.

Delta is the only listed casino operator in India and owns three of the floating casinos in Goa, as well as a property in Sikkim, Daman and shortly Nepal. For Q3, it posted a 22.7 percent rise in profit year-on-year to 59.04 crores, due mainly to a reduction in tax expenses.

Revenue from its casino gaming division fell 1.3 percent year-on-year to 200.15 crore. Revenue from its hospitality division also fell 28.6 percent to 11.7 crore.

It, however, saw a slight increase in income from online skill gaming operations.

Earlier this year, industry experts said the slight drop and flattish revenues were mainly attributed to increased competition in Goa due to the entry of Big Daddy casino.

While land-based gaming is struggling to take off, the online side is expanding fast. Under the law, games of skill, even for money, are legal and therefore India has seen a profusion of companies offering online rummy and poker.

According to the 2019 edition of the FICCI-EY annual report on India’s media and entertainment sector, online gaming revenue increased by 59.4 percent last year to INR49 billion ($703 million). Real money gaming soared 82 percent to INR26 billion, while casual gaming rose 40 percent to INR22 billion.

Lottery says GST “crippling”

India’s lottery operators are seeking urgent General Sales Tax (GST) reforms, alleging the tax is “crippling” the industry.

Mr. Kamlesh Vijay, Group CEO of Sugal & Damani said one of the impending issues is the differential in the tax treatment between state-government run, and state government authorized lotteries.

Under the current rules, 12 percent GST is being charged on lotteries run by State Governments directly, while a 28 percent tax rate is being levied on the lottery tickets authorized by state governments.

“This huge difference in the tax rate on the same commodity acts as a tariff barrier for smaller states like Goa, Sikkim, Arunachal etc. when their tickets are sold in other bigger States like West Bengal or Kerala,” he said. However, Vijay said a bigger problem has been how the GST Council has interpreted “taxable value on the lottery.”

Police arrest 58 in Delhi bust

Delhi police busted a gambling ring and arrested 58 people in October, who were operating a casino from a hotel room.

Organisers were contacting traders and businessmen via WhatsApp to invite them to a gambling party, local media reports. During the late-night raid police recovered Rs 11 lakh and 6,000 chips worth 84 lakh, as well as five specially designed poker tables.

Police also seized a large quantity of illicit liquor. Devendra Arya, DCP of south-west Delhi said that organisers of the party were booked under the gambling act and other IPC sections in Vasant Kunj south police station.

Organisers had planned six similar events in the run up to the Diwali festival, which is considered as an auspicious time to gamble.