Context: 

Union Minister Ashwini Vaishnaw recently clarified in the Lok Sabha that the regulation of betting and gambling in India is primarily a state subject. This response was given to a query by DMK MP Dayanidhi Maran regarding the ban on online gaming sites. Vaishnaw highlighted that, as per the Constitution of India, states have the authority to regulate gaming and betting activities within their respective territories.

What is Gambling?

Gambling refers to any activity where the outcome is determined by chance or accident, or any activity where participants consciously risk winning or losing.

This includes games like prize competitions and wagering contracts. While some states have legalized forms of gambling, others remain strictly opposed, citing concerns over addiction and its impact on social fabric.

Arguments For and Against Gambling

There are both critics and proponents of gambling in India:

• • Critics argue that gambling leads to crime, corruption, and money laundering, particularly in unregulated environments. It can encourage illegal activities and exploit vulnerable individuals.
  • Proponents, however, claim that regulated gambling can be a significant source of state revenue, supporting public services and welfare programs. Furthermore, the gambling industry can generate substantial employment, from casino jobs to those in the hospitality and entertainment sectors.

About Online Gaming (gambling) Regulation in India

In India, online gaming is regulated through a combination of legal provisions:

• • State Laws: Each state has the authority to regulate gambling activities within its boundaries, which includes deciding whether to permit or ban online gaming platforms.
  • Central Laws: The Public Gambling Act of 1867 and the Prize Competitions Act, 1955 exempt skill-based games from penalties. The Information Technology Act, 2000 also regulates online activities but does not specifically mention gambling.
  • Taxation: Online gaming is taxed at a rate of 28% GST on the full entry value. Winnings above Rs. 10,000 are taxed at 30%.

The Growing Online Gaming Market

India's online gaming industry is experiencing rapid growth. In 2023, India became the world’s largest gaming market with 568 million gamers, generating USD 2.2 billion in revenue. This market is projected to grow to USD 8.6 billion by 2028.

The rise of smartphone penetration, increased internet accessibility and the popularity of localized content are key drivers of this growth. However, this growth also brings concerns over the potential social impacts, including gaming addiction.

Conclusion

The debate over the regulation of online gaming and gambling in India remains dynamic. The clarification highlights the federal structure of governance, where states have the authority to regulate these activities. As the market continues to expand, states will need to balance the economic potential of the online gaming sector with concerns about its societal impacts. The future of this rapidly growing industry will likely depend on effective collaboration between the central and state governments to establish a clear and fair regulatory framework.