The coronavirus pandemic has left many in India stuck at home during a series of total and partial lockdowns, and such isolation, combined with some of the world's cheapest internet rates, has made it both tempting and easy to gamble online. But opportunities to bet and lose large sums while spending only about $20 a year for 24 gigabytes of internet access have brought calls for tighter regulation.
Gambling in India, which largely comes under the purview of state and union territory governments, is outlawed by all but four: Goa, Sikkim, Daman, and Nagaland. But online betting apps are illegal only in Andhra Pradesh and Tamil Nadu, which both banned such money-based games in November last year, citing rising bankruptcies and suicides.
According to market and consumer data provider Statista, in fiscal year 2018 India had 269 million online gamers, with the figure rising to 365 million in 2020. It is expected to further increase to 436 million in the current fiscal year and to 510 million in 2022. But the consultancy Deloitte said in a January report that India's online gambling industry is expected to expand at a compound annual growth rate of 40% to $2.8 billion by 2022, up from $1.1 billion in 2019.
Online poker is seen as key drivers of online gambling. Money-based fantasy apps have also drawn attention and raised concerns over youth vulnerability.
Even venture capitalists have committed an estimated $400 million to the Indian gambling sector in the last five years. In September 2020, Dream Sports, the parent company of Dream11, India's largest online fantasy sports company, secured fresh funding of $225 million from Tiger Global Management, with TPG Tech giving it an estimated valuation of $2.5 billion.
Also in 2020, Softbank-invested Paytm saw $20 million in funding from AG Tech Holdings. Earlier, in 2019 Sequoia and Times Internet put a $41 million investment into Mobile Premier League, another mobile gaming app.
Investors are also looking ahead to India's launch of 5G telecommunications, expected to be rolled out as early as the middle of next year. It is poised to transform the gambling experience through dramatically faster internet connections, likely drawing numerous new users and turning gaming into a spectator sport.
That technological leap is what the current wave of nearly half a billion dollars in venture investments is chasing, though it remains to be seen how laws and regulations adapt to the expected further rapid growth.
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