Lecture Notes: The Indian Gaming Market

Introduction

• Guest: J. Deep Chakravati, gaming consultant and involved in the creation of the first Indian Gaming Commission.
• Discussion focus: Indian gaming market.

J. Deep Chakravati's Background

• 21+ years in the industry.
• Started career with Ladbrokes in the UK.
• Worked in Gibraltar with Ladbrokes International for Bingo, Casino, and Poker.
• Moved to Mauritius for software gaming company.
• Returned to India in 2010, worked with Cozy Games (now acquired by GVC).
• Worked with a slot game development company and then with Nektan (Marot Technologies).
• Transitioned to full-time consulting, involved in setting up the first Indian gaming commission in Meghalaya.

Indian Gaming Market Overview

Legal and Skill-Based Gaming

• Skill gaming companies (Ramy, Poker, Fantasy Sports).
• Growing trend in Esports.

Lottery Industry

• Legal and state-licensed.
• Example: West Bengal – daily lottery sales of £8-9 million, significant tax revenues.
• Limited to a few states but substantial business.

Traditional vs. Modern Betting

• Historical reliance on local bookies and underground betting markets.
• Shift to online platforms like Betfair.
• Major brands like Betway becoming prominent in sports betting (notably in cricket).

Casino Industry

• Presence of online casinos operated offshore, not paying Indian taxes.
• Increasing government scrutiny on offshore operations.

Taxation and Regulation

• Recent implementation of 28% tax on stakes (effective from October 1st).
• Applies to all gaming companies, including offshore entities expected to register and comply.
• Government's focus on promoting non-stake games like esports.

Challenges of New Taxation

• Companies restructuring to comply with new tax policies.
• The ambiguity in practical implementation.

Future of Indian Gaming Market

• India follows a federal structure; states have autonomy in regulating gaming.
• Potential for significant revenue from a regulated market.
• Growth in tourism linked to legal casinos in states like Goa and Sikkim.

Market Evolution and Potential

• Unregulated cricket betting already rivals football betting globally.
• States might realize the revenue potential and create more regulated markets.
• Comparison with historical alcohol regulations in India.

Practical Advice for International Companies

• Two strategies: wait for market regulation or enter now and adapt.
• Importance of having a high-quality sports betting product to meet the demands of a sophisticated user base.

Example: Walmart's Entry into India

• Waited years for policy changes to enter legally and fully.

Current Players and Market Readiness

• Companies like Betway and 1xBet are established despite regulatory uncertainties.
• Entrants need superior products to compete against well-informed consumers.

Conclusion

• Indian gaming market is vast and rapidly evolving with large potential for growth.
• Need for regulatory clarity and fair taxation.
• Government awareness of lost revenue from unregulated markets.
• Significant demand and increasing disposable income among Indian consumers.

Final Thoughts

• Players in India looking for new entertainment options beyond traditional ones.
• Continued monitoring of technological advancements and regulatory updates is crucial.
• Enormous potential if the market can achieve a balance between regulation and market freedom.