Indian iPoker Market Currently Worth $120M

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Monday, December 26th, 2016 | Written by Charles Washington

Overall, 2016 has been a mixed year as far as online poker is concerned. In some parts of the world, the market has continued to struggle as various countries made it the year in which to crack down on the industry, thus resulting in a great deal of pain for international operators.

On the other hand, there have been some triumphs, as well, and you need only look to the example of India for what may be a surprising turn of events. While its true that the sub-continent’s online poker industry is still small and in its first stages of development, following the issuing of two legal iPoker licenses in the state of Nagaland, the Indian market seems to now present a potentially huge opportunity rife with possibilities for major poker firms.

Federal Acceptance

Just like in the United States, online poker is not legal at the national level in India, but is left up to the individual states to decide whether it is a game of skill, and therefore suitable for legalization. In those states where lawmakers label poker as a skill-based game, online poker can be legally offered online, and gambling companies are able to seek a license.

As mentioned, just the small state of Nagaland has officially passed regulated online poker, and so far online poker license have been issued to the sites of khelo365.com and pokabunga.com. Nevertheless, other states that are online poker-friendly have also seen start ups running online poker sites within their borders, including Spartan Poker, Poker Baazi and Adda52.

A $120 Million iPoker Market

It is estimated that only about 50,000 Indians are currently playing online poker through these start-ups, but the companies are still reportedly profitable. All in all, industry experts believe that sites have made around $120 million in gross gaming revenue this year, and investors are already taking note, especially as that figure is just a drop in the ocean compared to what a fully regulated industry in the country of 1.25 billion could generate.

As Amaya CEO Rafi Ashkenazi, the company which own Pokerstars, explains: ““We estimate the market in India to be anywhere between $80 million to a $150 million a year. But it will take time to build up this level of revenues from India.”

So far, just two official regulated iPoker licenses have been issued by the state of Nagaland out of the ten companies which have so far tendered their applications. If the state can subsequently demonstrate that the key to success lies through regualtion, then other Indian states are sure to follow suit, thus leading to a boost to revenues in the future.

An Investor’s Market

The large Indian hospitality company, Delts Corp, recently purchased Adda52 for around $2.3 million, with the brand currently India’s biggest online poker site. It was debt free when purchased, making revenues with an operational margin of 30 to 35 percent, and the success of Adda52 suggests that there is money to be made for entrepreneurs in online poker startups. However, those who want to foray into the gambling market must meet strict government standards in order to operate. Specifically, they must:

• Be funded entirely by Indians with no foreign direct investments
• Partner only with Indian companies for technical support or development
• Use software developed in India
• Agree to pay a 15 percent service tax on all revenue
• Deduct a 30.3 percent tax from player winnings that exceed 10,000 rupees

A Recreational Market

Still, for those that are willing to jump through the government’s hoops in order to obtain iPoker licenses, there is an appealing market ready to play. Only about 1,000 of the 50,000 estimated online poker players in India are believed to be professionals, meaning that India has a thriving recreational market that operators in the United States, Europe and other parts of Asia would likely envy. After all, the industry is currently focused on gearing sites more toward casual players and less to the pros.

With such favorable conditions, experts predict that online poker startups in India will have a good year in 2017, and that big name investors that have not noticed the success will likely do so soon enough. Provided the market does not become over saturated, online poker is therefore likely to continue to be a good gamble for entrepreneurs in India for the foreseeable future.