In the spring of this year, Karnataka became the fourth Indian state to ban gambling – but the effects have the federal government wondering if prohibiting online casinos is the right way to go. Online casino bans have left gambling enthusiasts flocking to international and even illegal scam casinos, while state governments miss out on substantial tax funding from these enterprises. In comparison, players and casinos themselves are monitored for safety throughout Europe and the United States, where gambling is allowed and regulated.
Few federal regulations have left India as a wild west of sorts when it comes to online gambling. Hundreds of thousands of citizens are engaging in some form of gambling, whether it is fantasy sports or card games at online casinos. New marketing studies show that casino brands are some of the most recognizable in the country due to their popularity and a lack of regulation that allows casinos to advertise just about anywhere, according to Adgully.com. Users find ways to download games even when they are banned from official app stores or using foreign services altogether to get around local laws.
With bans in Tamil Nadu, Telangana, and Kerala not being nearly as effective or easy to enforce, the Finance Minister announced earlier this year they have gathered a committee to consider the merits of legalization, following the European model.
Sweden is known worldwide as an excellent base for gambling, and because they have legalized and regulated the industry so much, Swedish casino brands are some of the most popular worldwide. Scandinavia, in general, has opted to go the route of legalization long ago, as they realized that gambling bans only put citizens in danger. When a country outlaws casinos, they prevent any local casinos from being used. Instead, gambling fans tend to move on and use casinos with licences from Gibraltar, Malta, or any of the other countries that regulate this industry.
Reuters.com reports that many companies are already pushing back against Karnataka’s new laws, citing that the economy and jobs sector will take a huge hit. One of the reasons Sweden legalized gambling was that the state could take advantage of taxes, licensing fees, and other financial incentives.
Karnataka’s ban is so strict it may cause several companies and startups to shut down, as their ban includes “games of skill,” like fantasy sports. “Skill-based gaming cannot be compared with gambling, and banning is not a solution. The Indian regulatory framework has clearly differentiated between games of skill and games of chance. Just because games of skills may involve an entry fee or registration fee, they cannot be compared to gambling. Moreover, all the online skill gaming platforms have state-of-the-art technology in place to ensure responsible gaming practices,” said Roland Landers, CEO of All India Gaming Federation. With various parties arguing about what constitutes “gambling” versus “games of skill,” this further divides state governments on the merits of legalization.
For example, Telangana’s ban on gambling was enacted with the local government citing “safety” for their citizens as a top reason. With many at home during the Covid-19 pandemic, reports show that online gambling is at an all-time high. At the same time, with a lack of regulation, individuals can lose large sums of money or even engage with scam casinos, which caused them harm and became the basis on which this state government created the law.
In Scandinavia and the US, state governments report that legislation has helped them bypass these problems, at least in short-term studies. Countries that have legalized gambling have set up agencies that oversee the fairness and security of casino brands used by their citizens.
Regulation aids in finding and shutting down scam/blacklisted businesses more efficiently. These countries also have laws that require casinos to intervene in cases of fraud, laundering, or extreme losses. Casinos are required to offer listings for help in cases of addiction and have limits on where they can advertise.
When Indian states ban gambling, they can be doing more harm than good, as, without regulation, the industry can take advantage of citizens. In the post-pandemic era, when most states are considering hiking taxes or funding extreme spending bills to churn the economy, legalizing gambling is still under consideration by many of India’s other states. Making websites illegal has never gone well, anywhere in the world, which is why many casino brands are simply left waiting for the federal government to take action.
