India missing out on internet gambling tax revenues

India could be missing out on as much as $1.5 billion in lost tax revenue by not regulating online gambling, the Times of India reports this week, quoting a recent research study on the issue.

“Despite a booming middle class and a rapidly expanding internet user base, only the state of Sikkim has made any meaningful efforts to regulate online gambling in India,” the report said. “On a national level, there seems to be little desire to regulate this lucrative market – even though an ever-increasing number of Indians gamble online.”

The study estimates that India’s online gambling market, if regulated, would be worth $5 billion. Using current levels of taxation applied in markets where online gambling has been regulated – typically 15-30 per cent of operators’ gross revenue – it would mean the Indian fiscus is possibly missing out on as much as $1.5 billion per year in potential tax revenue.

This figure is likely to grow over time, with internet usage growing rapidly in India, and more and more Indians now joining the middle classes, the online gambling market will grow rapidly in the years to come.

Regulation would bring other benefits, the report suggests. As in other countries, regulation of gambling – including online gambling – can create jobs, whilst offering players better protection through efficient regulation and licensing.

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