How Much of an Economic Boost Can Meghalaya Expect from Legalizing Gambling?

Kashmir Times. Dated: 6/25/2022 2:22:34 PM

The Northeastern State Targets Tourists with Licensed Casinos and Online Gambling

SevenJackpots Casino

Last year Meghalaya abandoned its decades-long prohibitive stance on gambling and betting and adopted a liberal legislation over offline and online gaming in a move to attract tourists and boost the local economy. The new licensing regime enables skill- and chance-based gaming with stakes, as well as sports betting.

"As we have seen in many states, this venture has positive impacts not just in terms of GST revenues but also in terms of generating a lot of employment opportunities from the vibrant tourism industry," James P. K. Sangma, Law and Taxation Minister of Meghalaya, stated.

On March 26, 2021, the state notified the Meghalaya Regulation of Gaming Act, having previously nullified the half-a-century-old Meghalaya Prevention of Gambling Act, 1970. On December 21, 2021, the Meghalaya Regulation of Gaming Rules were notified.

The Most Liberal State in India

With its move to join the Indian online casino scene coupled with land-based gaming establishments, Meghalaya outdid all other states in India, including long-established gambling haven Goa, with the extent of its gaming liberalization.

An April 2022 report by the UK India Business Council (UKIBC)on India's Sports and Gaming Market Potential analyzed the differences in the status of gaming in all states and union territories of the country.

The UKIBC study ranked states and UTs according to an index of 0 to 100 points based on an analysis of their legal stance on seven modes of gaming - lottery, rummy, poker, horse racing, fantasy sports, sports betting and casino.

Meghalaya emerged as the leader scoring 92.85 points and marking an ‘Yes' in all seven categories, followed by Sikkim with 85.71 points. Goa, Nagaland and West Bengal took the next three positions with all of them scoring 71.43 points.

The last place was taken by Andhra Pradesh with 7.14, preceded by Telangana, Arunachal Pradesh and Odisha, all scoring 14.29 points. Among the union territories, Dadra and Nagar Haveli and Daman and Diu leads with 57.14, and Chandigarh is last with 28.57 points.

Goa's Experience Proves that Gaming Liberalization Boosts the Economy

An Overview of Goa's Casino Communities published in 2021 by Esse N Videri analyzed the positive direct and spillover effects to the small western coastal state's economy brought by Goa's casino industry after the first casino licenses were issued in 1992.

The state, which showed up on third position in the UKIBC ranking, currently has around a dozen land-based electronic casinos located in luxury hotels and six floating live-dealer casinos on ships anchored in the Mandovi river. Reportedly, the license fees in the beginning of the 2010's were ₹2.5 crore for a land-based casino and ₹6.5 core for an offshore one.

The casino industry's contribution to the Goa exchequer was estimated at ₹135.45 crore for the Financial Year of 2012-2013 combined across direct and entertainment (pre-GST) taxes, entry fees, liquor licences and port charges.

After a significant growth over the next few years, the casino industry's direct input to the state revenue collection reached ₹330 crore for FY2017-2018, and grew further to ₹414 crore for the next Fiscal Year of 2018-2019.

Besides the paid taxes and fees, and the employment of around 5,000 local residents according to estimates from the early 2010's, casinos bring an array of spillover benefits and earnings around them. This includes the growth of various related business activities that support the functioning of casinos, as well as the hospitality and food-catering sector, additional forms of entertainment, sightseeing and others.

After 2012, Goa was forced to abandon one of its major drivers of economic prosperity - iron ore mining, following a ban imposed by courts, and the state focused on promoting tourism, an industry largely based on casinos and gambling. Recent figures show that tourism is responsible for generating approximately 30 percent of Goa's GDP.

Considering the contrast between Goa's GDP per capita of ₹476,370 and Meghalaya's GDP per capita of ₹96,015 (according to 2018-2019 figures), an almost five-fold difference, Meghalaya has a lot to catch up on. The decision to back up the state's scenic nature with a legalised gaming entertainment as an incentive to attract tourists has been proven a successful strategy for economic growth. It remains to be seen how well will Meghalaya fare along this road to prosperity.





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