ICE London tentatively got underway yesterday (Monday 5), with the World Regulatory Briefing featuring several hot topics up for discussion.
One such example was its ‘India Briefing,’ coming after recent news from the nations sports ministry seeming to lay the groundwork for legalised sports betting across the vast market.
Vaibhav Gaggar, Managing Partner of Gaggar Partners Solicitors, discussed the current sports betting situation within India and possible steps moving forward: “The legality as it stands today is that sports betting is illegal, and there are two schools of thought on that.
“There are people now who are actually going ahead and saying that that is the wrong reputation, unfortunately there hasn’t been enough movement there.
“The Law Commission of India actually came up with a report very recently saying that it is time to legalise and regulate sports betting in India, online sports betting.
“And that is a massive step forward because this was done under the auspices, and in the direction of, the Supreme Court of India.
“This issue was raised as, why should sports betting be illegal in India, which is something that needed to be looked into, so the law commission looked into that.”
Before adding steps that could be taken should the Commission’s report look favourably on the issue, and the Supreme court steps in: “There are two ways that laws are going to get made in India, one is if the court says and the other is legislative process.
“Legislative process, as everyone knows, is run by politics and you don’t know what is going to happen with that.
“Even though we have got a strong central government, that means there is a strong possibility that in the next two years we will have a law that is going to totally regulate and legalise online sports betting in India.
“But there is every possibility that even before that, the courts may actually give its stamp of approval, in which case it is all going to open up.
“The reason for that, is that it is more than a $60bn market per year and it is totally underground, and the government is waking up to the fact of the losses, the tax loss that is happening, the totally unregulated manner it is happening, the underworld ethics etc.
“There is a very very strong movement and I think everyone is very optimistic that in less than two years we should have a regulated legal online sports betting system in India.”
With such a large market, estimated to be around 300m-400m for online sports betting, and growing at an annual rate of 8%, would a legalisation be at a nationwide level or a state by state basis: “It’s one thing to say, three, four, five states have legalised it, and yes every state in India is still probably as big as a country in Europe in term of the population, so it’s still a large market.
“If you look at it being legible in states that have a right to prohibit it, then that is a different ball game altogether.
“You have got around 600m people online in India, with the largest number of millennials in the world, I don’t know which way it is going to go but we are all hoping, fingers crossed, it is going to go the latter way, and prohibition will have to be required for states to say no.”
With such a vast market, however, comes a substantial tax rate, predicted to be in excess of 30%.
But where it is argued that the huge numbers in terms of population justify such a hefty number, Gaggar believes that the current underground nature of sports betting within India is not an issue that will quickly be pushed aside: “The bad apples will still exist, and the reason for that is that the taxation is going to be very high initially.
“And there are people who are going to play the license game and are actually going to face this entire issue, because the black market economy is also a significant part of the economy in India.
“Despite what happened last year, when the Prime Minister announced one evening that nobody is allowed to have more than £2,000 of cash belonging to them anymore, at all, and it was all taken away.
“Despite that, 50% of the economy is still black, so the bad apples will still exist.”