Business Forecast: Online Gaming Market to Register CAGR of 22.65% Over Next 5 Years

Online gaming, or iGaming, which includes the gambling industry, continues to be a thriving industry in India. Studies by Mordor Intelligence predict a 22% total increase in overall profits within the next five years.

Online casinos are expected to show an annual growth rate (CAGR 2022-2027) of 7.57%, resulting in a projected market volume of Rs. 4 billion by 2027, according to Statista. Additionally, the gaming industry is expanding India’s digital marketing industry, which is rising at unprecedented rates, reaching over ?6 billion in 2022. India’s gaming sector is one of the world’s largest, adding around 80,000 jobs last year, according to a report by Teamlease Digital. The same report forecasts massive augmentation in digital employment, with economists preparing to add another 100,000 jobs in FY2023.

After a slow 2022 year, India’s government is focused on encouraging gaming companies to create more high-level and high-tech games, especially as access to such media increases throughout the country. Continuing improved access to the internet and cell phones, along with a significantly young population, all contribute to the expansion of video games, casino games, and sports betting apps.

The flourishing online casino industry draws in plenty of foreign investment, a much-needed boost for a post-Covid economy. Considering the importance of keeping the economy on track, Prime Minister Narendra Modi gathered a panel in New Delhi last Fall, prompting a review of the regulations and tax laws for players and provider companies. Prior to this year, video game companies and casino game developers were usually counted in the same category, but PM Modi’s panel decided last year to differentiate the two so they could attach new tax rules for players. The 2023-24 federal budget introduced two new provisions for TDS (tax deducted at source) on online gaming, including a new levy of 30% on payment of net winnings in a financial year for online casino players, and the removal of the current ?10,000 TDS thresholds.

India’s biggest gaming companies are listed as Nintendo, Sony, Rolocule, and EA, each raking in millions every year thanks to India’s tech boom. Most of India’s largest online casino providers are located overseas, providing much-needed foreign investment into the country. The Mordor Intelligence report also found that “some of the most prominent Indian publishers are Gametion Technologies Pvt Ltd., Words Mobile, Moonton, Moonfrog, and Games2win.com. Overall, 3% of all game publishers on Google Play are from India, which suggests the increasing dominance of Indian players in the Android gaming industry.” Local gaming companies are increasing in popularity, and recent stipulations by the government about what constitutes a “game of chance” or a “game of skill” show that local lawmakers have a preference for native games and the providers creating these programs.

Economists found that the internet is far cheaper throughout India than most major countries, making cell phone gaming more accessible. With smartphone sales consistently breaking records in India, more consumers than ever can download casino apps and games. For the first time ever, 2022 marked the year India overtook China for most downloads of smartphone games. India’s markets are nearly 2.5 times larger than China's and three times larger than the US gaming industries.

With many businesses shutting down during covid, online casino websites in India gained popularity as individuals hunkered down for state-wide quarantines. The popularity of online gaming has helped the industry survive several economic downturns. Game development will continue to be one of the most aggrandized industries, as stated by Statista reports.