India Supreme Court hears gambling regulation tax debate
The Supreme Court of India is presiding over a complex debate concerning the nation’s gambling regulations, with an intriguing new dimension added to the issue.
The court heard the gaming industry’s position on the Goods and Services Tax earlier this week on Monday (April 5).
It is a levy attached to all products and services in the country, but gambling throws up ambiguity, in regard to how the tax is applied to the sector.
Controversy arises because the flat tax does not differentiate between different types of gaming, the specifics between games of skill and chance.
A further grey area exists as sports betting in India is sometimes classed as a game of skill, by using knowledge on sports to predict outcomes, banded together with the likes of poker and blackjack, which require mathematical competence.
Conversely, roulette and slots are categorically considered to be games of chance, and not impacted by skill or knowledge.
All of this could change as the government’s legal representative wants to secure reform and clarity in the definitions.
As reported by The Hindu, Solicitor General N. Venkataraman presented the position that regardless of a game being dependent on skill or chance, gambling takes place once a wager is placed.
Venkataraman outlined: “Then it will become gambling, in spite of being a game of skill. Betting on a game of skill is statutorily considered gambling.”
The government is advocating that this makes all of the above games of chance, and that any earnings should be subject to the GST.
A fragmented, fledgling market
It is a complex debate, but in the background, there is no adequate national legislation to cover gambling.
The fragmented market means there is no federal standard across India. Some states outlaw gambling, and in adherence to the Public Gambling Act of 1867, public gaming venues or outlets are prohibited.
However, three states do have a fledgling gambling market.
Daman, Goa, and Sikkim all permit casino and online gaming activity, with horse racing also prevalent at race tracks.
The definitions matter as the government is considering replacing the archaic legislation with a framework designed and relevant to contemporary challenges.
As part of this, India represents an attractive proposition for major international gambling operators.
One of those is Flutter, which confirmed in its Q1 trading update that Indian iGaming revenue – essentially derived from the three named states – had increased 45% year-on-year.
Image credit: Supreme Court of India
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