While the ICC Men’s Cricket World Cup is underway, Think Change Forum (TCF), an independent think tank dedicated to innovative ideas, has released a report titled “State of the betting & gambling industry in India” that has lauded the Indian government for swift action to regulate online betting in the country.

The report lauds the government for introducing a progressive regulatory framework by proposing to amend the IT rules to regulate online gaming and setting up self-regulating bodies called SROs.

However, unless these measures are rolled out rapidly, the new GST regime will divert growth from legal gaming to illegal betting and offshore players, IANS reported from New Delhi.

As per the report, the offshore sports betting market receives an estimated Rs 8.2 lakh crore (USD 100 billion) per annum in deposits from India and has been clocking a rapid growth of 20 percent per annum in the last three years of the pandemic. Factors such as digital infrastructure growth, smartphone usage, and the expansion of athletic events have contributed to this growth. In India, despite regulatory restrictions, the country’s betting and gambling market has shown remarkable growth.

According to the report, at a baseline estimated deposits of Rs 8,20,000 crore (USD 100 billion) are being received from India, at the current GST rate of 28 percent, India is losing a GST collection of Rs 2,29,600 crore, per annum.

In addition is TDS on player earnings which are estimated to be 90 percent of post GST deposits. This works out to another Rs 1,59,408 crore in taxes, making the total tax loss stand at Rs 3,89,008 crore.

This still does not include tax loss from corporate taxes and taxes on foreign entities.

To arrest this loss, the report recommends strict implementation of the new GST regime by establishing a task force to monitor illegal offshore betting activities and forcing offshore operators to register in India to protect the outflow from legal gaming platforms to offshore platforms.

Without such stringent measures, the new regime could lead to the diversion of growth from legal gaming companies to illegal betting platforms and offshore operators, resulting in substantial tax losses for the government.

The report further suggests that if the government were to opt for active enforcement and a moderate taxation policy, retaining GST at 18 percent and that too only on platform fees as earlier, it would be possible to divert 50 percent of deposits from offshore and illegal gambling to legal gaming.

This will net in new tax collections of Rs 1,18,080 crore per annum for the government. Over the next 3 years, at a compounded annual growth of 20 percent, this will swell to tax collections of Rs 2,04,042 crore by 2026.

While there are numerous market research reports that delve into the global betting and gambling market, this is the first report to venture into estimating the actual size and potential growth of the betting and gambling market in India.