Theory of legalization of online gambling in India, how it might affect the economy of India

Theory of legalization of online gambling in India, how it might affect the economy of India

In India, throughout its history, gambling has existed in varied forms. Right from Mahabharta to the more modern online gambling and sports betting, it has made front news headlines from time to time.

Throughout the world, gambling and other forms of betting are common.


Gambling or ‘games of chance’ was curbed during the British Raj. Laws were framed and implemented to control the activity of gambling.

Can legalizing Gambling actually help the economy through these tough times? - The Week

It is not uncommon in India to see people bet on animal fights on the street, cockfights, playing card games.

This traditional form has now transformed into people betting on cricket and other national sports. 

There have been heated debates on whether gambling should be legalized or if strict laws are needed to clamp down this activity.

With crores of money exchanging hands illegally every day, whether, through traditional methods or sports betting or online, the advantages and disadvantages of the same are like two sides of the coin, each fighting to land upright.

Gambling Regulations in India

In India, only three states – Goa, Sikkim, And Daman allow gambling activities.

Five – star casinos and offshore vessels can, as per the Goa, Daman and Diu Public Gambling Act of 1976, facilitate physical casinos.

Online gambling in India is still in infancy; across India, people can still play casino games since the law presently does not regulate the online gambling market. 

It is an area that is still grey, and hence while it is not entirely illegal to gamble online, it is not legal either.

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In fact, Sikkim, in 2010, planned to offer three online gambling licenses. However, despite India being the most popular country for online gambling, it failed.

Sikkim also permits an online lottery, which takes allows bets from players throughout India; it was thought that other states might follow suit, leading to an opening of a major online gambling market throughout India.

Covid- 19 and online gambling

With the entire country going under lockdown due to the Covid -19 pandemic – Online gambling saw an exponential increase. By using the loopholes in the regulations, it becomes feasible to register accounts at online operators. Several admit Indian players, and it is an enormous market.

Debate on Online Gambling

A considerable debate on the question as to whether India should legalize gambling has been on for many years now.

They are those who support the rules and regulations, claiming that it would increase money laundering, crimes, and corruption.

Also, gambling raises the question of morality as it can become a dangerous habit with consequences that can affect families and households. 

The other side supports the legalization of gambling, saying that it can benefit a country’s economy.

According to MyCasino, An Indian casino aggregator, there could be several benefits related to the legalization of gambling in India. 

This debate has gained momentum, especially during the Covid – 19 pandemic, as most countries’ economies, including India’s, are in the doldrums.

Increase in Tax Revenue

With most states falling short on funds needed to operate, those who support the legalization of online gambling argue that it would increase governments’ revenue.

The government would be able to collect vast sums of money by imposing taxes on online gambling activities.

An enormous market of online gambling already exists. By regulating the same, the revenues can help bring a much-needed boost to the Indian economy. The government can then invest in several needed projects. 

KPMG report put the size of the gambling market in India around $50 – $60 billion

However, recent reports of studies done by financial institutions put this estimate to be even higher.

It is said that with just 15 percent GST, the government could earn crores in revenue by legalizing sports betting.

On the other hand, if online gambling and casinos are also permitted in a healthy restrictive way, both the state and the central government could earn tremendous tax revenue.

These can be used to fund Covid -19 health and other productive projects of the government.

Employment opportunities

With the unemployment rate at an all-time high – regulating the gambling market can open new employment opportunities for many.

Many argue that with the legalization of gambling activities, India, with its second-largest population in the world, can cut down the unemployment rate.

It has been seen that wherever gambling is regulated, it has created a massive employment generation opportunity.

In India, around 25 – 40, lakh jobs could be created as direct and indirect jobs.

According to global figures, the U.S. employs over 2.5 lakh people in the gambling industry. In contrast, over 1 lakh individuals are employed in the U.K.

Curtail Underworld syndicates.

One of the advantages of legalizing gambling in India would definitely cut black money and money laundering and curtail the underworld’s finances. 

Underworld syndicated control large portions of gambling and sports betting without proper regulations. These finances are then used for unethical activities.

If regulated, nearly $60 billion of gambling revenues could be removed from the black markets. 

How Online Gambling Can Help The Indian Economy In 2021 - Inventiva

Updated laws on Online gambling

Many Indians, as of now, indulge in gambling and betting online. The current set of laws in India do not cover online gaming and sports betting.

The outdated laws do not explicitly cover online betting. The online casino and sports betting platforms are separate from existing land-based casinos in Goa and Sikkim.

With the proper law, Indians can bet legally. At the same time, the government will be able to control both online and offline activities.fline.

Addressing the lack of proper legislation, legalization of betting would offer an updated law that would be enforceable.

Prospects for Indian Based Casinos

Indian casinos will benefit by offering their own games online if the Indian government creates laws that allow online gambling and betting. 

Since many Indians are already gambling on foreign websites, the Indian casinos could compete by pending their websites for people throughout India.

This would give local casinos the much-needed opportunity to compete with global websites. More transactions would be done in rupees.

Hence, this would facilitate profits and wagered amounts to stay within the country instead of going abroad.

Enabling verification of Citizen ID cards

Each person’s identity can be verified if the legalization of online gambling is enabled.

This would help get more people to gamble legally and verify their identities with the government. The government would then be able to limit how much a citizen is making or not making. 

This prevents social welfare individuals from gambling their funds online. Moreover, it would limit the amount of money fraud and laundering.

Using caps and limits, ID verification would be one of the most significant implications of legalized gambling.

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Final Thoughts

Notwithstanding the negative perception of gambling in society, it can benefit India from overcoming the economic crisis.

There are many examples of how a regulated market can be a source of vital revenue. The gambling wouldn’t just impact entertainment, but it goes beyond enabling other industries.

We hope that the prospect of gambling legislation is going to be addressed shortly. 


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