Turmoil in Goa as Minister Backtracks on Gambling Act Changes

Panoramic view of Taj Mahal during sunset reflected in Yamuna river, in Agra , Uttar Pradesh, India

India has long had a tumultuous relationship with gambling. Goa is one of only three provinces in the country that has legalized gambling and in recent months there have been a number of high-profile controversies. After the leading minister in the province had promised changes to a major gambling act, he has now decided to backtrack on this decision.

India and gambling

India has always had heavy restrictions on gambling, with only a few exceptions being made. However, since the turn of the century, there has been a steady increase in the level of illegal gambling in the country, and many have called upon the government to introduce more lenient laws.

The state has long argued that gambling is often the catalyst for money laundering, corruption, and crime. However, gambling proponents highlight the massive revenue source it could be for the country. Currently, casinos are allowed to operate only in the provinces of Sikkim, Daman, and Goa.

There are currently two casinos located in Sikkim, with ten of those in Goa, including four that are floating on the Mandovi River. The 1976 act that allowed casinos in these three provinces stated that only offshore vessels or five-star hotels can have casinos and they also need to receive permission to do so from the government.

Because of its large population, India is one of the markets that most online operators are eyeing. The province of Sikkim tried to get online gambling licenses in 2010 but was not given the go-ahead. The province does currently have an online lottery up and running, and there have been recent calls to allow fantasy sports platforms.

The situation in Goa

There is now a lot of uncertainty in the province of Goa after the political leader there reversed himself on planned changes to the gambling regulations.

Manohar Parrikar, the chief minister in Goa, said on July 4 that there was no need to change the Public Gambling Act of 1976. He claimed that this act already had enough provisions for casinos functioning restrictions. Now there is a lot of uncertainty as to what his plans are next for the gambling sector in the province.

There is no gaming commissioner currently in place, something that was supposed to have been changed by an updated version of this act. There was also supposed to have been clarification on was the definition of “offshore” means.

In the future, the six casinos that are floating in the province are to be moved onto land (this move is expected by July 2020) and the groups involved don’t want any legal loopholes that could change the plans to have them located in a designated gaming area.

This is not the first controversy that casino operators in the province have dealt with this year. As well as not knowing where they are going to be located in the future, there have been significant increases in the annual fees that they must pay the state for their licenses, and major probes are being conducted related to tax evasion.

Each of the ten casinos operating in Goa had been subjected to a tax evasion probe, with the state body claiming that all of the casinos had not paid their tax obligation on their license fees between 2014 and 2016. They were supposed to pay a tax of 15% on their license fees.

With the hikes in license fees, current casinos had to pay $145,000 (£110,000), compared to $44,000 (£33,000) in 2017. There was also a rise in the security deposit fee for the renewal of licenses, rising from $14,500 (£11,000) up to $36,000 (£27,000).

There are specialized fees for land-based casinos depending on their size. Casinos that have an operating area of less than 100 square meters saw their annual license fees increase to $1.45m (£1.1m) from $581,000 (£440,000).

Casinos that have operating areas greater than 1,000 square meters saw their annual license fees go to $5.8m (£4.4m) from $1.2m (£910,000). For the floating casinos, those that can hold under 200 passengers saw annual license fees increased to $3.6m (£2.7m) from $1.7m (£1.3m). Those that can hold more than 400 passengers saw an increase from $1.7m (£1.3m) to $5.8m (£4.4m).

In a clear sign that the state really has no wish for new casinos to open up, the application fee has increased from $2.9m (£2.2m) to $7.26m (£5.5m), and there is also a security deposit worth $7.26m (£5.5m) that is not refundable.

It is clear that the officials in Goa are not supportive of the casino sector and the outlook for future changes to the gambling regulations in the state is not optimistic.

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