India gov’t urged to allow foreign direct investment in gambling sector

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A non-profit pro-gaming group in India is lobbying the government to permit foreign direct investment (FDI) in the country’s gambling, betting and lottery sector.

On Tuesday, the Economic Times reported that the All India Gaming Federation (AIGF) had written to the Union Minister of State for Commerce & Industry urging him to amend the laws prohibiting FDI in India’s gambling sector “in the interest of the nation and its citizens.”

Under Para 5.1 of the FDI rules, foreign firms are prohibited from any form of technological collaboration in the gambling sector. The prohibition also covers franchise, trademark, brand name and management contracts.

The AIGF notes that the government has been amending the FDI rules to exempt certain industries and suggested gambling should be included in the list of exemptions. The AGIF suggested allowing international companies to take an equity stake of at least 26% in gambling joint ventures while allowing Indian firms access to these firms’ technology.

The AGIF believes Indian firms would derive huge benefits from the use of foreign technology, while claiming that the law change would result in international firms investing over Rs 100b (US $1.5b), resulting in the creation of thousands of white collar jobs.

AIGF CEO Roland Landers said it was “in everyone’s interest” to lift the FDI restrictions. Outside of a few notable pockets of liberality, gambling is largely illegal in India, but Landers notes that “the Victorian attitude of prohibition gambling is no longer in sync with modern day thinking.”

The Commerce & Industry ministry has replied to AIGF’s appeal by saying it was considering the request and would make its views known shortly.

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