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What can India’s newly created online casino industry learn from the UK? – EasternEye

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What can India’s newly created online casino industry learn from the UK? – EasternEye

What can India’s newly created online casino industry learn from the UK? – EasternEye

By:
chirag amin

The UK is seen as a pioneer when it comes to loosening restrictions on gambling while simultaneously tightening the regulation of the sector. While this might sound contradictory, the UK is not the only country that has recognised that if people are going to gamble, they should do it safely. In addition, when properly regulated, online gambling can be fun entertainment like any other leisure or gaming experience and provide welcome revenues to state coffers and good causes.

Since the UK National Lottery was first drawn on November 19th 1994 over £39 billion from ticket sales has gone to fund good causes in sport, the arts and heritage and community projects. The National Lottery is heralded as the first step towards the liberalisation of the UK gambling industry. It was followed by the Gambling Act 2005, which saw the creation of the Gambling Commission in 2007.

The UK Gambling Commission’s remit is to regulate individuals and businesses that provide gambling services in Great Britain. Its remit is to create a safe environment where people can gamble and for there to be somewhere for people to turn in the event of something going wrong. It is an independent public body funded by license and application fees set by the Secretary of State, approved by the UK Parliament and paid for by the gambling industry.

The UK took a pragmatic approach to gambling and changed the law to cover new-generation gambling machines and online gambling. When the Gambling Act was first established, it was almost impossible to imagine how significant online and mobile gambling would become. However, the introduction of the iPhone and the flood of alternative smartphones and devices changed mobile and mobile gaming for good.

While internet connectivity and mobile speeds were still incredibly slow, the most forward-looking mobile device was the Blackberry, which allowed business people to send emails and take calls. However, by 2013, the company was in freefall because it had been in denial about where the industry was going. The gambling industry, on the other hand, recognised the incredible opportunities that smartphones and improved technology presented and created more and more attractive and compelling gambling games.

The Gambling Act of 2005 did not have adequate provisions to provide a sufficient framework to protect players who were susceptible to problem gambling, and changes had to be made to strengthen the safeguards in place. While responsible companies recognise that they need to build a sustainable relationship with their customers, there were too many operators who were happy to make a quick buck. A rise in problem gambling caused media backlash, and the UK government made a number of significant changes.

In the UK, despite tight regulation, the industry has continued to flourish. A UK-based online casino has to adhere to a strict set of rules, but this means that everyone knows where they stand, and a UK gambling license is seen as a Trustmark. Gamblers know that sites have the correct security protocols in place, and operators are legally bound to adhere to responsible gambling rules. The UK now boasts one of the world’s most regulated online gambling markets, but that does not prevent it from generating billions of pounds in revenue for operators. Millions of players enjoy top-class entertainment and innovative gaming safe in the knowledge that they are gambling on reputable sites.

The UK has a wide range of online betting options, including casino games (live and video simulations, sports betting, fantasy leagues, bingo, slots and the perennially popular National Lottery and its spinoffs. Although Labour brought in The Gambling Act of 2005, they still haven’t been hugely vocal about their plans for gambling in the UK moving forward. They’ve put their plans for renters’ rights and worker protections front and centre, but have stayed rather quiet on the iGaming industry, specifically in their pre-election manifesto.

India has taken a more hands-off approach and is relying on a self-regulatory system. Recent changes to the law say that there has to be a clear definition between games of chance and games of skill. This is critical to legal operations in the country. This is where the Self-Regulatory Organisations / Bodies (SROs and SRBs) come into play.

India amended the IT Rule in 2023 to introduce a joint regulatory system rather than a single government regulator. The SRO system is a combined effort between industry bodies and the IT Ministry. The SROs and SRBs will define what is skill and what is pure chance, and the industry has been afforded flexibility and control. In the UK, the Gambling Commission is the ultimate arbiter despite being funded by the operators. It has a duty to act in the best interest of the players.

Former Indian government official Dr Aruna Sharma is quoted as saying,

“The Self-Regulatory Organisations formed under the guidelines of IT Rule 2023 have a major role to play in establishing these parameters.”

The success of this approach will lie in the ability of the SROs to balance regulation and innovation. It will also require them not to be greedy or exploitative. Unfortunately, UK experience in this area would suggest that without strict oversight, the industry might be unable to resist taking a gamble and seeing what it can get away with.

The balance will be between finding the correct path between innovation and regulation. There are still so many grey areas in the Indian online gambling market. Many people are recommending a comprehensive legal framework rather than the piecemeal state-by-stake approach. The framework needs to include licensing, taxation, player protection, and responsible gambling provisions.

Blockchain and artificial intelligence (AI) could offer solutions around transparency and security on online gambling platforms. However, without robust regulation, there is also the possibility of abuses of trust and security.  While blockchain technology can create tamper-proof transaction records and game outcomes, which should ensure fairness and accountability, many people are wary of it.

Online casinos in the UK have learned the importance of offering people plenty of payment options with processors people know they can trust. A big difference between the UK and India is the levels of’ unbanked’ residents. This figure is around  2% in the UK, but in India, it is 11%, and in rural areas, cash is most definitely king. Internet penetration in India is also lower than in many more developed economies, and this will probably be the biggest hurdle the industry will have to overcome.

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