In India, the world of gambling stands at the intersection of tradition and modernity, enveloped in a web of legal intricacies. Gambling in India has a long history, but its legal framework remains ambiguous. Governed by a combination of state and central laws, certain forms of gambling, like lotteries and horse racing, are permitted, while others, such as casino games and online betting, face restrictions.
Yet, the rise of online platforms has made gambling more accessible, sparking debates overregulation. As technology and interest evolve, India faces a pivotal moment in determining the future of its gambling industry. In this article, we will see the current legal scenario in the country in regards to gambling and the related companies listed on the stock exchange and the impact on them.
Gambling Vs Betting
Gambling involves risking money or valuables on uncertain events, aiming to win more. It requires three elements:
- A stake
- Risk, and
- Potential reward.
Betting, a subset of gambling, typically focuses on predicting outcomes in sports or other events. While gambling encompasses a broad range of activities, betting is more specific. Both involve risk and potential rewards. However, betting usually has more defined parameters and is commonly associated with sports.
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Gambling can include games of chance while betting often relies on knowledge or skill in predicting outcomes. Despite these differences, betting is ultimately a form of gambling, as it shares the core elements of risk and potential financial gain.
Legality of Gambling in India
In India, authorities regulate or control most gambling activities, though they make exceptions for sectors like lotteries and horse racing. Because gambling falls under state jurisdiction, only state governments can legalize and oversee gambling in their regions.
Notably, the Public Gambling Act of 1867, commonly known as the Gambling Act, serves as the primary legislation governing gaming nationwide. To effectively manage gambling, various states have consequently enacted their own laws. However, it’s important to recognize that lawmakers established most existing gambling regulations before the rise of online gaming and betting.
As a result, ambiguity surrounds online gambling, especially since many companies or third-party websites register in foreign countries or tax havens. This situation, therefore, makes it challenging for the Indian government to control or regulate these entities, as they operate outside its jurisdiction. Despite these challenges, the gambling landscape in India continues to evolve, prompting ongoing debates about regulation and enforcement.
Supreme Court’s Stance Regarding: “Game of Skill Vs Game of Chance”
The Supreme Court has defined skill games as competitions where success largely depends on substantial skill, not mere chance. Consequently, they don’t classify horse racing or dog racing as gambling in most cases, due to the significant skill involved. Interestingly, the court also declared rummy a game of skill.
The apex court also reasoned that rummy requires a certain amount of skill since the fall of cards has to be memorized and the building up of rummy requires considerable skill in holding and discarding cards. It is mainly and predominantly a game of skill.
In contrast, they deemed the three-card game “flash” or “flush” entirely chance-based, thus categorizing it as gambling. As a result, we can infer that India generally allows skill games. However, certain situations or conditions may still lead to some skill-based activities being classified as gambling. This distinction highlights the complex nature of game classification in Indian law.
Industry Outlook
Experts predict India’s online gaming sector will make a remarkable leap, aiming to hit $4.6 billion by 2026, up from $2.6 billion in 2023. The rising popularity of mobile-based real-money gaming and casual gaming experiences drives this surge. E-sports, fantasy sports, and casual gaming will likely lead the charge, attracting an estimated 150 million daily users.
In-app purchases will probably see significant growth. However, consolidation trends may challenge companies. Despite these hurdles, the industry’s future looks promising. The anticipated rollout of 5G technology across India will further boost gaming experiences.
Gambling or Gaming Stocks Listed on the Stock Exchange
Nazara Technologies
Nazara Technologies, founded in 1999, is a leading mobile gaming and sports media platform based in Mumbai, India. With a workforce of over 500, the company has evolved into a diverse gaming powerhouse. Nazara’s portfolio includes interactive gaming, and eSports through popular brands like the World Cricket Championship, CarromClash, Kiddopia, Nodwin, and Sportskeeda. The company has also entered the real money gaming sector with Classic Rummy.
With a market capitalization of ₹8,131 crore, Nazara Technologies shows promising financial growth. Revenue increased from ₹1091 crore in 2023 to ₹1138 crore in 2024, while net profit jumped significantly from ₹61 crore to ₹75 crore. Earnings per share improved from ₹5.96 to ₹8.16. The company’s revenue breakdown for FY24 reveals eSports as the largest contributor at 55%, followed by gaming at 36%, and ad tech at 9%.
Future Outlook
Nazara Technologies is set for continued expansion in the gaming industry. The company aims to leverage its existing distribution network for global growth, focusing on mobile-first markets. Build on leading market position and growth opportunity in India and improve the technology to enhance the existing platforms.
Nazara Technologies is making big moves in gaming. First, they snapped up Fusebox Games for ₹228 crore, aiming to grow in story-based games worldwide. Then, they grabbed a hefty 47.7% chunk of PokerBaazi’s parent company for ₹832 crore. These bold steps show Nazara’s hunger to dominate different gaming niches. Keep an eye on this rising star in the digital playground.
Strategic acquisitions, like WildWorks for gaming and Datawrkz for ad tech, will further enhance Nazara’s product portfolio and geographical footprint. With India’s online gaming revenue projected to reach $2.03 billion by 2027 and the number of online gamers expected to grow to 18.6 crore, Nazara is well-positioned to capitalize on this booming market.
Key Metrics
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OnMobile Global
OnMobile Global, established in 2000, is a leading mobile entertainment company headquartered in Bangalore, India. With a global presence spanning 68 countries, the company serves 122 customers across its product range. OnMobile boasts an impressive monthly active user base of 6.59 crore, including 76 lakh mobile gaming subscribers and 5.57 crore mobile entertainment subscribers.
The company offers innovative products like ONMO, a cloud gaming platform, and Tones, a popular mobile entertainment service with over 6.32 crore users across 36 global telecom operators. Apart from this the company also provides online games and hosts real-money gaming contests on its platform.
OnMobile Global Limited has a market capitalization of ₹990 Cr. The company’s revenue slightly decreased from ₹525 crore in 2023 to ₹513 crore in 2024. However, net profit more than doubled, rising from ₹6.8 crore to ₹15.3 crore. Earnings per share improved significantly from ₹0.63 to ₹1.43.
The revenue breakdown shows Videos as the largest contributor with an average of close to 50%, followed by Contest and Infotainment ranging between 25-27%, Mobile Gaming at 14-16%, and Tones at 2-3%. This diverse product mix demonstrates OnMobile’s strong position across various mobile entertainment segments.
Future Outlook
OnMobile is well-positioned to capitalize on emerging opportunities in gaming, gamification, and telecommunication. The company plans to innovate with cutting-edge gameplay features and explore adjacent sectors like digital entertainment and streaming services.
OnMobile aims to leverage its expertise in cloud gaming, offering seamless access to high-quality titles worldwide. The company is also developing industry-specific gamification solutions for education, healthcare, retail, and finance sectors.
Furthermore, OnMobile is in advanced discussions with operators to include gaming and mobile entertainment services in bundled packages, potentially expanding its reach and impact. With its innovative spirit and strategic vision, OnMobile is poised to shape the future of mobile entertainment and redefine user engagement with technology.
Key Metrics
Delta Corp
Delta Corp, established in 1990, is India’s sole listed casino operator. Headquartered in Mumbai, the company has carved a niche in the gaming and hospitality sector. Delta Corp operates three offshore gaming vessels on the Mandovi River in Goa, an all-suite hotel with an onshore casino in north Goa, an integrated resort in Daman, and land-based casinos in Sikkim and Nepal. Moreover, the company has diversified into online gaming with adda52.com, expanding its reach in the digital realm.
With a market capitalization of ₹3,520 Cr., Delta Corp’s financial performance shows resilience. The company’s revenue slightly decreased from ₹964 crore in 2023 to ₹925 crore in 2024. However, net profit remained stable, moving from ₹262 crore to ₹245 crore. Earnings per share saw a minor dip from ₹9.75 to ₹9.12.
Breaking down the revenue for 2023-24, Casino Gaming contributed the lion’s share at ₹812.83 crore, followed by Online Skill Gaming at ₹146.80 crore, and the Hospitality Division at ₹50.85 crore. This diverse revenue mix underscores Delta Corp’s strong foothold in various segments of the gaming and hospitality industry.
Future Outlook
Delta Corp is poised for strategic growth while navigating regulatory challenges. The company has established strong partnerships with local governments to ensure compliance with evolving regulations. To mitigate geographic concentration risk, Delta Corp is expanding its presence beyond Goa to Sikkim and Daman.
In an exciting development, the company is constructing a 450-room hotel in Goa with a capital outlay of ₹450 Crores, set to be the largest in the region. Furthermore, Delta Corp is diversifying into real estate, participating in a ₹765 Crores investment in residential redevelopment projects in the Mumbai Metropolitan Region. This multi-faceted approach, combining expansion in the core gaming business and strategic diversification, positions Delta Corp to capitalize on the growing leisure and entertainment market in India.
Key Metrics
Conclusion
India’s gambling and gaming scene is buzzing with action. Laws are tricky, but tech is booming. Nazara, OnMobile, and Delta Corp are jumping on board, riding the wave of online gaming fever. More phones and faster 5G are fueling the fire. But it’s not all smooth sailing – the government’s still figuring out what’s a skill and what’s a chance. Online platforms are shaking things up, making old rules look outdated.
As India dives deeper into this wild world of gaming, there’s a lot to figure out. How do we keep the fun while playing it safe? Can gaming help build real-world skills? The story’s far from over, and the next chapter could be a game-changer.
Who knows what exciting twists and turns lie ahead? Questions for the readers: How might legalizing online gambling reshape India’s job market and tourism industry? Could gaming companies team up with schools to create fun, educational games that stay within the law?
Written By Dipangshu Kundu
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