India’s gambling landscape is once again under fire following the rise of illegal online gambling.
According to a recent study by the Centre for Knowledge Sovereignty (CKS), the market, which already sees an estimated $100 billion in annual deposits, is projected to grow by 30% in the coming years.
The enticement of attractive offers such as new no deposit bonus codes, visit AussieCodes for a selection, further incentivises users, exacerbating the issue. The government’s attempts to curb gambling have inadvertently fueled the growth of the underground market, creating a growing ecosystem that thrives on anonymity and fewer restrictions. As the situation escalates, there is an urgent need for balanced regulations that address the root causes while protecting consumers.
Current Landscape
The Indian government introduced new rules earlier this year to regulate the online gambling market. Among these rules was a proposal to establish self-regulatory bodies composed of online gaming companies to set and enforce industry standards. Despite these measures, a recent study has shown that only a small fraction of online gamblers in India fully understand these regulations, leaving them vulnerable to unregulated operators.
The study, conducted by Ken Research and titled Consumer Behaviour Analysis for the Online Gambling Industry in India, found that over 25% of online gamblers face significant issues, including identity theft and transaction problems. Vinit Goenka, Founder Secretary of CKS, blames the inadequacies of the current legal framework for creating an environment where illicit gambling and betting can thrive. He pointed out that illegal operators are exploiting the new tax system, which imposes a 28% tax on deposits for legitimate gaming platforms, by misleading consumers into using their platforms with false claims of being exempt from GST or other taxes.
Recent estimates also show that online gaming companies operating under the new GST framework contributed INR 3,500 crore in the October-December quarter. The central government anticipates collecting up to INR 14,000 crore in GST from this sector in the upcoming financial year, with projections reaching around INR 80,000 crore over the next five years.
Failed Bans
Goenka also criticized the Ministry of Technology’s attempts to ban offshore betting sites, stating that these efforts have been ineffective as illegal operators simply reemerge under new web domains. The current strategy of issuing sporadic blocking orders under Section 69A of the IT Act, including recent actions against 22 illegal betting apps and websites, has not produced the desired results. Moreover, state-level bans on skill-based games are not resolving the ongoing illegal gambling problem; instead, they are exacerbating it.
Influencer Marketing Crackdown
In March, the Central Consumer Protection Authority (CCPA) issued an advisory regarding celebrity endorsements following a significant increase in influencer marketing promoting illegal gambling. This advisory is part of a broader effort by the government, which has repeatedly warned social media platforms against promoting betting services. Under the Public Gambling Act of 1867, non-skill-based gambling remains illegal in most regions of India.
The CCPA highlighted that influencers who market gambling create the misleading impression that betting is acceptable despite its illegality. Consequently, celebrities who endorse such activities are considered “equally liable” for the offense.
What’s Next?
To address the growing issue of illegal gambling, CKS has recommended that the government establish a dedicated task force to combat both offshore and domestic operators. They also proposed creating a “Whitelist” of approved companies offering skill-based games, ensuring that only these operators receive services from payment gateways, hosting providers, and internet service providers.
With over 1,330 homegrown gaming startups generating $2.8 billion in revenue, India’s gaming industry is projected to grow at a CAGR of 21 percent, reaching over $7 billion by 2026. Pay-to-play gaming is expected to dominate this sector, accounting for 83 percent of revenue. CKS forecasts that AI and online gaming could contribute as much as $300 billion to India’s GDP by FY 2026-27.
*The opinions expressed in this article are purely those of the author and do not necessarily reflect the views of TFI Media. The content should be taken as the sole perspective of the writer.