Goa, Gambling & Godfathers

With Goa being one of the only two states where gambling is legal, reopening the casinos from November 1 in the state raised many eyebrows. Does that impact us in any manner?

“Goa casinos to reopen on November 1” – announced the Goa chief minister Pramod Sawant with a view to “promote tourism activity in the state”, on October 28, bringing smiles to the faces of Goan population. The tourist industry is currently the biggest industry in Goa, making up 40 percent of the state revenue in 2018. But why did a government that has repeatedly rebuked casinos and even called them things like “dens of vice” and “a social evil”, is now vouching for them?

Well, let us understand first that even though gambling is illegal in India, there are no specific gambling laws in the country and every state can do whatever they like. This is the reason that you see casinos in Goa and Sikkim, betting on horse racing in Maharashtra and even legalised lotteries in some states like Kerala.

Coming back to Goa – After beach shacks, casinos are the second biggest tourist pull in the state. There are six on-shore casinos in Goa while 9 operate out of five-star resorts. The government currently charges between INR 10 crore to INR 12 crore as an yearly fee for off-shore gaming, depending on the passenger capacity of the vessels. Land-based casinos pay INR 4 crore a year. The Goa government collected INR 411 crore in revenue from onshore and offshore casinos in the state in the financial year 2018-19!

What? Yes!! But who owns these casinos?

Well, there are more than one godfathers of Indian casino industry. The top of the list adorns Delta Corp Ltd. which owns three of the six offshore casinos in Goa, along with one 5-star restaurant casino in Sikkim and Daman each. Deltin Royale and Deltin JAQK, amongst the country's two largest offshore casinos, and Deltin Caravela, the only floating hotel with a casino in India are owned by Delta group. Apart from this, the group own and operate the online poker site 'Adda52.com', the online rummy site 'Adda52rummy.com' and the online fantasy sports site 'LeagueAdda.com'. (Online Betting industry is another over the top game, which we will probably save for later!). The Ashok Khetrapal fronted group is the next big casino operator with Casino Pride and Casino Pride 2 anchored in the Mandovi. Pride also runs the land-based Casino Paradise at Porvorim and Casino Palms at Baga. These two groups contribute to more than 50% of the revenues from gambling industry, which brings us to our next question: If casinos are such revenue harbingers, why not allow them everywhere? What is the confusion?

Well, even though casinos pay the annual license fees and taxes, no one really knows what goes on behind fancy casino doors. The casino industry has mostly operated underground and in shady nooks. Government regulated casinos require high end policy making, with no loopholes. But what does current scenario look like?

Inconsistency and flip flops have been the hallmark of government policy on casinos in Goa. The intended confusion has not only encouraged, but practically endorsed an unregulated conduct of the business. Although many debates have been running in the country on whether gambling should be regulated, rather than banned; the dilemma remains unresolved. According to a report, the Government is believed to lose out on revenues amounting to 4000 crores to 5000 crores every year due to revenue leakages from the cash intensive casino industry. No, this is not an exaggeration!

Let us take an example:

On any given night, the streets of Panaji, near the city’s jetty, are packed with parked vehicles – a visible hindrance to those who live in the area. This no doubt is clear proof of how busy the casinos are. While the bigger vessels pack up to 1500 gambling enthusiasts a day in what’s become 24×7 operations, particularly over the weekends, the smaller vessels crowd in some 800-1000 passengers. The amount of transactions per day or the cash exchange per day is unknown.

Image Source: freepik

According to News18, a report in 2016 by the Doha-based non-profit International Centre for Sport Security estimated that the overall illegal betting market in India was doing business worth $150 billion, or nearly INR 10 lakh crore at the then exchange rate. In 2016, India’s GDP was about $2 trillion. In other words, turnover from illegal gambling and betting was estimated at 7.5% of GDP!

In five years, gambling and betting have grown rapidly without a doubt, but let us assume, for the sake of argument here, that INR 10 lakh crore is the total turnover even today. Now, if we were to assume a conservative turnover tax of 10%, the potential revenue would be INR 1 lakh crore, or about the same as GST collection in a good month. Yes we agree that these assumptions are broad, but they are not outlandish!

Gambling is enshrined in Hindu mythology since ages. Shiva and his consort, Parvati, gambled, using dice (she usually won). There are many ancient sculptures in Ellora and elsewhere testifying to this, additional to passages in the Hindu scriptures. Parvati is even believed to have said that those who gambled on the night of Diwali would prosper while those who did not would become donkeys. Which is why gambling is common, at least in North India, during Diwali, though it is illegal. Knowing the stringest policies and complexities in their implementation, gambling is legal only in states of Goa, Sikkim and UT of Daman in India.

However, despite loud protestations about morality and the public good, most state governments could not wait to profit once again from the vice. With India poised for record-low economic growth and tax collections this financial year and Diwali around the corner, there is no better time than now to legalize, organize and profit from an activity that Indians incontrovertibly love—gambling.

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By: Anmol Gupta | Isha Garg