UK India Business Council Calls For Central Gaming Regulator

April 27, 2022
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The UK India Business Council has called on India’s central government to regulate gaming, including sports betting, and allow regional governments to cede day-to-day oversight to a national regulator.

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The UK India Business Council has called on India’s central government to regulate gaming, including sports betting, and allow regional governments to cede day-to-day oversight to a national regulator.

In an April report entitled “Gaming for Growth – India’s Sports and Gaming Market Potential”, the council recommended that the burgeoning gaming industry needs to balance state autonomy with regulatory “uniformity” that only a national framework can provide.

“The gaming market spans the entirety of India, it therefore needs to be regulated centrally, rather than at the State-level,” the report said.

“Model guidelines and drafts can be put forth at a central level, similar to lotteries in India.

“Each state can decide whether it wants to … allow gaming and to what extent [it wants] to allow gaming. This will maintain the autonomy of the state on Entry 34 [of India’s Constitution], whilst also bringing in uniformity.”

The report says governments should adopt the findings of the Law Commission of India, whose report in mid-2018 backed regulation of non-skill gaming with stakes despite acknowledged concerns over the moral impact of legalisation.

“In short, India, Indian citizens, and the wider gaming sector stand on the verge of reaching a new settlement that could significantly benefit all and bring greater alignment between states.”

The central government should regulate all gaming segments and “draft and enforce clear, intuitive, and effective responsible gambling and gaming regulations”, the Council’s report says. “These should draw from international best practice to prevent underage gambling [and] addictive and financial difficulties.”

The council’s report largely consists of a review of the Indian gaming market by segment, locality and demographics, with recommendations built on “extensive consultation with Indian and international businesses, gamers, parliamentarians, the legal profession and international regulators”.

The report has been released as several states, under pressure from their High Courts, move toward regulation of land-based and online skill games with stakes, although Karnataka state, for example, is resisting with an appeal to the Supreme Court.

The report says this pressure, including the overriding of “unconstitutional” bans on online skill games, is instructing state legislatures that gaming laws should be “enabling” rather than “imposing prohibition”.

A more granular recommendation of the report “on behalf of industry” calls on India’s GST Council, which is reviewing gaming industry obligations, to impose a streamlined tax on gross gaming revenue (GGR; gross takings minus payouts) rather than on gross takings.

It added that India’s maximum 28 percent GST rate for gaming services would better retain customers and tax volume for governments if calculated on GGR or commission instead of turnover.

The report was prepared for the UK India Business Council by Chris Heyes, a director of the council, and Vidushpat Singhania, managing partner of Krida Legal and a council consultant.

The council currently claims 94 paying corporate members, including major international banks, law firms, energy companies, retail companies, auditors and educational institutions.

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