30% taxes on player winnings – Does this pose a risk of an overinflated online casino black market in India? (Photo by Igor Ovsyannykov on Pixabay)
This is a story about 30% player taxes on winnings and a call for blanket bans on cryptocurrency. Real discussions on these topics are happening in the country right now for better or worse.
In the run-up to what will almost certainly become a country-wide online gambling licensing authority put in place, some officials that have influence over India’s online gambling rules could end up on a windy road. One that could take years to navigate and cause irreparable damage.
One of the issues is red tape. And I am not saying red tape isn’t a good thing, because it can stop monstrosities occurring in a country that is about to become the world’s most populated. However, there is a tendency for some government bigwigs to exert power or to test respect instead of relying on solid research or past lessons in other countries.
Problem number one. Domestic news outlets confirm that the country will enforce a mind-blowing 30% tax on all online gambling winnings. This levy will begin in June this year.
Problem number two. India’s Central Bank Governor, Shaktikanta Das, is asking for a blanket ban on cryptos. He flatly believes that digital assets are simply another form of gambling. Yes, we are talking about the likes of Bitcoin that since 2011 has seen a yearly increase of 200%!
The black-market issue: If players in India can access overseas casinos, this could create a huge online casino black market. I base this opinion on what we have already seen in the UK where restrictive measures prevent casinos from offering crypto and restrict players freedom, and in Australia where lack of online casino licensing. Both countries are now recording record sized black market online casino gambling markets.
30% tax on winnings is asking for trouble!
Now, I am not one to tell anyone how to run the country. And I also believe a regulatory authority for online gambling and cryptocurrency are both good things. Especially gambling because there needs to be some control over how to stop problem gambling and help those who fall into this trap. In fact, according to a recent The Times of India news report, Ashwini Vaishnaw, Union electronics and IT minister, has confirmed India is ready for online gambling regulation. This is great news, but it’s probably not going to go as planned.
The report mentions that the country needs to implement a regulations fast to prevent citizens from falling foul to the harms of gambling And although the responsible gambling and player protection are key focal points, let’s also not forget that domestic licensing also has an ulterior motive. Drum roll, please! Of course, it does – tax for the government… Noe that means 30% tax on winnings creates two key issues.
- The grand plan: Now the government will earn tax if players are playing in casinos operating under the country’s licensing framework. Those players’ money will create the tax from paid from profits or revenues by the operators themselves. And of course, from the 30% player winnings tax. But why the tax o winnings if it’s going to cause so many problems? Surely scraping it will earn the government more tax revenue? The UK doesn’t do it and is profitable at a population not even close to India’s. In fact, most countries don’t do it, except the land of the IRS in the good ole USA.
- The real problem: 30% tax will inevitably create an online casino black market. According to some estimates, there are currently around 5,000 online casinos in operation worldwide. I would venture as far as to say 2,000 of them are ready to accept players from India with total disregard for any domestic licensing. And there are already millions of Indian players playing at these casinos. Why would these players switch to a regulated gambling platform in India if these overseas casinos are not taxing them 30% on their winnings? Therefore, the black market will exist from day 1 of the licensing coming into effect with very little incentive to quit playing at these casinos.
The next question is, will these overseas casinos continue to accept players from India?
Why wouldn’t they? They are in the business of making money, and they already do the same for the UK. To the point that some ads specifically target players who have used GamStop to quit gambling because they believe they have a gambling addiction problem. A black market storm for India is almost certainly on the cards!
Concerns about the success of India’s regulatory framework
- 30% tax on player winning seems excessive
- Taxes will drive players to the online casino black market
- Will India ever recover from an inflated black market?
- Are taxes & licensing fees from operators not enough?
- Risk of not resolving the purpose of the licensing (player safety)
- Problem gambling will still be a big problem
- The government will not earn taxes from black market gambling
Central Bank governor calls for a blanket ban on cryptos – citing they are a form of gambling!
You could hardly blame people for looking at cryptos and dubbing them a form of gambling. However, stock markets are also the same, aren’t they? The only real difference is that cryptos are more highly volatile. OK yes, and there they are not regulated in the same way as financial companies. Anything else?
However, banning cryptos in India is yet another sure-fire way to create yet another black market. As we have seen in the UK, yes, the country of gambling issues, if you ban crypto, you will force a black market. And this is in a country where digital currencies are regulated.So India faces two issues with banning crypto, and they are not pretty. Those that will use dodgy exchanges to get their hands on digital assets and then head over to black market casinos to gamble them.
Enjoy news about black market zones? Although this type of news is terrible business, it is also newsworthy! That’s why I write about it, and that’s why you read about it. So just in case you missed it, and relevant to the examples of the UK made in this story, feel free to check out the UK Black Market Gambling Rises new story here.
Leave A Comment