Thursday, June 30, 2022

Could Sikkim be a role model for India?

The All India Gaming Federation recently conducted a one-day study and panel discussion throwing the spotlight on the tiny state of Sikkim, one of only three in the country where gambling is legal, with participants noting it could be a model for the rest of India to follow.

Nestled in the Himalayas, the state has been at the forefront when it comes to legalizing gambling, permitting casinos, sports betting, online gambling and lotteries, which are contributing to the development of the economy.

Despite this, the AIGF says there has not been any serious attempt to understand the regulatory framework; the benefits accruing to the state in terms of revenues and employment generation; or how the model implemented by the Sikkim government could be emulated by other states.

The AIGF is a lobby group launched in New Delhi earlier this year to promote the legalization of gambling in India. The panel was held in the capital, Gangtok, on November 19th. It was sponsored by French pari-mutuel operator, PMU International and brought together stakeholders from the industry such as RummyCircle, Essel Group, and the Sugal and Damani group.

Gambling is one of the few revenue generators for Sikkim, where large-scale manufacturing or agriculture is not possible due to the mountainous terrain. The government passed the Sikkim Online Gaming Regulation (Amendment) Bill last year, opening up online betting, including sports betting. Casinos are allowed in five-star hotels and online lotteries are marketed and sold into other states. Online lottery was introduced in 2001.

It is India’s least populous state and the second-smallest after Goa.

Jay Sayta, an expert on gaming in India and founder of the website Glaws, estimates that Sikkim currently generates about $15 million in gaming revenue and said the rest of the country should emulate the model it has adopted. He said the operating casinos have a clear set of guidelines to promote responsible gaming. “The rest of India can learn from Sikkim,” he said.

Currently, there are two casinos functional in the state, and a third is on its way. Golden Gaming, the company which owns both the existing casinos, is also running a betting centre which includes both online betting – offering games such as Roulette and Baccarat – and sports betting, a first in India.

The Deltin group, India’s only listed casino operator, will be launching a third casino in the near future.

Golden Gaming also runs around 170 online gaming kiosks in the state where betting on virtual horse-racing and keno, along with roulette, is available.   

However, other participants in the panel pointed out the limitations of Sikkim when it comes to developing the gambling industry, such as its remote location and lack of infrastructure. One  noted that without an airport in Gangtok, it took almost five hours to reach. “This will dissuade the High Net-Worth Individual to come and play here,” he said.

Local opposition to gambling in the state also remains strong. Local residents are not permitted in the casinos, but are able to play at online gaming kiosks. Media has also been critical saying the state government is betting on the lives of its citizens for monetary gains, ruining the spiritual culture in the process.

Sikkim has several ancient Buddhist monasteries and although these issues were not explicitly discussed by the panelists, they featured in several conversations among the participants who attended the conference.

Sports betting and the potential role it could play in generating funds to promote sports development were also part of the day’s discussions.

The Federation of Indian Chambers of Commerce told the panel it has been holding closed door meetings with the federal government in an effort to encourage the legalization of gambling to raise funds for the development of sports.

Rajpal Singh who is in-charge of the Sports division at the FICC, said the proposal had met with “a lot of support,” during meetings with officials.

He said the FICC had been seeking to educate officials about the benefits that legalizing gambling can bring to other sports in the country. He pointed out the overall sports budget in the country was around $150 million, out of which 80 percent was spent on paying the salaries of sports officials and coaches.

“The remaining amount is hardly sufficient to improve the sporting infrastructure in the country,” he noted. He said India should take note of the models set by the U.K. and China, which used money generated from lotteries to help fund their hosting of the Olympic Games.

U.K. Sport, the body which strategically invests funds from the National Lottery and the government, has a budget of about GBP523 million ($647 million). Sports receive about a 20 percent share of U.K. lottery funding, with 40 percent going to health, education, environment and charitable causes.

However, Albert Climent, founder of Bluesea Gaming and who moderated the discussion, noted that private support did not always translate to public endorsement in India when it came to gambling. This was a point seconded by Ranjit Sinha, former director of India Central Bureau of Investigation. Sinha stressed the need for a strong regulatory body to overlook gambling in India which would help deal with the “stigma” associated with gambling.

Asia Gaming Brief is a news and intelligence service providing up to date market information for worldwide executives on relevant gaming issues in Asia.

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