|India, the world's second most populated nation, currently stands ninth, by gross profits, in the list of the leading global betting and gaming nations.|
While, only 13 of India's 20 plus states allow lotteries, a large chunk of the world's fastest growing economy remains untapped by operators. Under Indian regulatory laws lotteries and horse racing, but legal cricket betting is banned. Industry estimates peg the Indian paper and online lottery markets to be worth 35,000 crore Rupees (US$8.1 billion) and Rs 1,000 crore (Rs 10 billion), respectively, with the horse racing betting industry estimated to be at Rs 1,000 crore.
In spite of the huge potential, a large part of Indian gambler's money goes into the notorious 'single-digit' lottery or patta games to betting on politics.
For instance, the recent historic Indo-Pak one-day cricket series, billions of dollars were wagered in the course of few weeks. A country, where democracy prevails, the stakes on elections are even higher than sports. Election related betting alone is much higher at 350-500 billion rupees, of which a majority is wagered in the illegal market.
Kapil Mahajan, a research officer at SEBI, a securities exchange regulatory body in India says, ‘The first and foremost benefit from legalizing gambling will be revenue generation for states.’
Only in the past three years have Indian states explored the commercial potential of the gambling industry. In 2002-03, the combined profit from state-run lotteries was 6.65 per cent of revenue receipts from the lotteries. The highest profit (in percentage terms) was for states such as Meghalaya (93.96) followed by Mizoram (93.5), and the lowest was for Haryana (0.19) followed by Goa (1.58).
Inefficiently run state lotteries, and disparity in revenue sharing has curtailed the potential of gambling says Mahajan. ‘Profits are very small in India (6.65 per cent) when compared to the United States market (30-45 per cent). If the industry is properly organized, significant sums could accrue to states,’ he says.
From a consumer stand point; legalizing gambling will provide more choice to more than 300 million Indians with disposable income. The SEBI official recommends that with clear regulations; improved code of conduct in advertising and investing in betting exchange facilities the huge potential of the gambling industry can be fully exploited.