Lawyers party on skill gaming challenges

 It’s been a busy year in India on the gambling front, at least for the lawyers involved in fighting court challenges on multiple fronts as to the legality of online skill gaming.

Games of chance are banned across India, apart from in a handful of states, such as Goa, Sikkim and the Union Territory of Daman. However, in 1996, the Supreme Court introduced a wrinkle with a ruling saying that games involving a high level of skill were exempt, even if they were played for cash.

This included highly popular games such as rummy and poker. As a result, online versions of these games had been proliferating across the country, attracting the interest of foreign investors, such as Canada’s Clairvest, which earlier this year bought a majority stake in Ace2Three for $74 million. 

The country’s biggest and only listed casino operator Delta Corp also ventured into the online space with the acquisition of Adda52.

However, in June, the state of Telangana threw a spanner in the works by banning online rummy. It charges that playing rummy online for monetary gains is a criminal offense as it involves both skill and chance and the presence of the latter makes it an activity tantamount to gambling, and not sports.

Kerala eyes more lottery revenue

The Kerala government says it is expecting to generate Rs.10,000 crores (US$1.5 billion) in lottery revenue for the 2017-18 fiscal year, after a decision was made to increase the number of daily printed tickets, local media reports. In the financial year ended March 31, 2017, the sale of state lottery tickets fetched an all-time revenue high of Rs. 7,395 crore. The Kerala State Lotteries Department (KSLD) has decided to print an additional 400,000 tickets a day, with effect from November 1, bringing the total number of tickets per day to 9.6 million.

Nazara Technologies to be India’s first gaming IPO

Mumbai-based mobile gaming company, Nazara Technologies is set to be part of India’s first public listing in the gaming space. The Rs 10 billion (US$156.6 million) IPO is aimed for the end of March 2018, according to sources. It is expecting a valuation of 30-35 times projected profit after tax (PAT) of Rs 100 crore in FY19,“ added the source. Founded in 2000, Nazara is known for its Chhota Bheem game. It has expanded globally over the last decade to 74 countries. It is also looking to expand its focus in the casual mobile gaming space, to going into areas such as esports, and real money skill-based gaming. Nazara is expected to be valued at around Rs 3,000 - 3,500 crore.

Where Telangana lead, several others have decided to follow. India has no federal law on gambling, and it is up to individual states to set out their position. Andhra Pradesh and Tamil Nadu have both also decided to ban online rummy, while the Gujarat High Court is currently deliberating whether or not to ban online poker. It is due to give its verdict towards the end of November.  

The murky legal situation has led to challenges and counter challenges, leading as high as the Supreme Court, which was asked to rule on a petition filed by Krida Sports and Games, arguing that rummy should be able to be played for stakes without police interference. The Supreme Court dismissed the claim, handing the case back down to the individual state courts.

Meanwhile, India’s Sports Ministry is asking for consultation as to whether betting on sports should be allowed. The government has asked for consultation from the country’s sporting bodies and is said to be looking at a model similar to that adopted in the U.K., although it has warned the process may take up to two years to complete.

On the land-based side, Goa’s floating casinos are waiting for new legislation that may see them shift from their position in the Mandovi River to a new entertainment zone onshore near the Mopa International Airport within the next three years. The new rules are expected to be revealed in December and will also see a strict ban on local Goans gambling. 

There are currently five boats moored in the river, while a sixth vessel that was supposed to make its debut ran aground and sat stranded for months on a sandbank before being towed off for repairs. 

Although there are no official figures for the size of the gambling market in India, the potential is thought to be huge. Statistics portal Statista put revenue generated by all gambling types last year at $113.5 billion, with a forecast to rise to $130.3 billion by 2018.

In its annual report this year, Delta said the industry had been growing at 40 percent a year for the past decade, with the rising middle class demanding more entertainment options.

In Q2, the company reported a 34.1 percent jump in profit, with revenue up 40 percent to Rs 189 crores ($29.1 million). Delta attributed some of its success to the contribution of its online gaming business. 

Delta runs three offshore casinos in Goa, as well as a land-based operation there, and at the beginning of the year opened a new property in Sikkim. Located within Hotel Denzong Regency in the capital Gangtok, the new casino hotel will offer approximately 150 gaming positions.

The company also plans to open an integrated resort in Daman. The luxury hotel has been open since 2014, though the company has not yet had the go ahead to begin casino operations. The IR has earmarked 60,000 square feet for gaming, with an expected 1,200 positions, as well as MICE space and multiple food and entertainment options.