India online gambling hopes suffer setback

The chances of online gambling becoming available across India have been dealt a blow after the one Indian state which permits the activity was told licensees must not offer products to players outside of its borders.

Operators had been hopeful that permits handed out by the state of Sikkim would eventually allow operators to target the rest of India, however, as part of the passage of the Sikkim Online Gaming (Regulation) Amendment Bill, it has been ruled this would violate the laws of other states.

The confirmation means the initial scope of the online gambling market for Sikkim licence holders has been dramatically cut from 1.2bn people to just 600,000, with online products to be made available via a state intranet in order to ensure they are unavailable elsewhere.

But speaking to eGaming Review, George Oborne, managing director of the free-to-play site India Bet, said the decision to kick-off online gambling regulation in India with a restricted offer comes as no surprise and even may prove to be beneficial to the industry in the longer term.

“This is the first step in what is sure to be a long process in developing a regulated market so it would have been very surprising if the first move in that process was to allow everyone in India to bet,” Oborne said.

“The fact it is a restricted product is a positive thing because if the regulation turns out to be poorly implemented then it’s not a total disaster, but if they were to open up the whole of the India to poor regulation then we might see online betting become an illegal activity for the next two decades,” he added.

According to Oborne, should the Sikkim regime prove to be a success, it could prompt a number of other revenue-hungry states follow suit and expand the online network, which would in turn make licences much more valuable.

But at present, the restricted Sikkim market is unlikely to garner widespread attention with only three licences handed out so far to Indian operators – federal law states that gambling cannot benefit from foreign investment – with the first product set to go live next month.

“The primary reason for the Amendment Bill was to put in place a system that couldn’t be accessed by people outside of Sikkim and it looks like it may have achieved that,” Oborne said.

“Although that doesn’t mean we won’t see things like we have in the US – I’m sure there will be people based up there placing bets on people’s behalf and pro punters and bookies will be up there laying off liabilities so it won’t just be the domestic market acting there,” he added.