report from gaming, tourism and hospitality consultant Global Market Advisors says that India has the potential to become a USD 10B annual legal gaming market. But international operators and major Asian gaming destinations remain fixated on China, despite diminishing returns, largely ignoring this outsized opportunity
GMA’s white paper by director of research and analysis Kit Szybala emphasizes India’s overwhelming prospects, demonstrated by demographics. As a US$2 trillion economy, India is already larger in GDP terms than Russia, South Korea and Australia, all of which are attracting interest from international casino investors. Yes, India’s per capita incomes are far below those three countries. However, India’s National Council Applied Economic Research estimates the nation’s middle class will reach 267 million this year, then more than double to 547 million by 2025. That think tank report defines middle class as earning between US$2,000 and US$21,000 annually. GMA, with offices in Bangkok, Taipei, Las Vegas and Denver, believes officially reported figures understate true income levels, as suspected in China, due to India’s vast underground economy. A McKinsey report on India consumer spending expects recreation (including gaming) to be one of top growth sectors in the 2014-2025 period.
Consultant G3-247 puts India’s casino gaming spending at US$30 billion and total gaming outlays, including sports betting, online gaming and passionate playing of rummy and traditional Indian card games among families and at clubs at US$60 billion
Currently, India has legal casinos in only two states, Goa and Sikkim, both domestic tourism destinations. Goa, a resort area on India’s Arabian Sea coast – and like Macau, once a Portuguese enclave – has about 15 casinos. Live table games are only allowed on floating casinos, although electronic table games in onshore hotels often simulate the live table experience. Sikkim in the Himalayas has a pair of casinos in state capital Gangtok, a good three hour drive from the closest airport, with a third gaming facility in a hotel scheduled to open later this year. Interestingly, Indian casino patrons pay Singapore style entry fees of US$15 to US$61, though unlike Lion City local punters, they may receive non-negotiable chips and vouchers for food and beverages in return. As of last month, Goa barred locals from playing at casinos.
“With a few exceptions, many of the Indian gaming facilities offer a largely underwhelming experience,” the GMA white paper observes, “yet Indian patronage of these facilities continues.” Goa gets an estimated 95% of the action in a market estimated last year at US$76 million, or 0.26% Macau’s US$28.9 billion, from about 1.8 million players, or 0.1% of India’s population.
Despite the market’s potential, international interest has been limited
There have been moves to open casinos in the states of Daman and Dui, where a license has been issued, and Maharashtra, which includes the city of Mumbai, but the processes move in fits and starts.
Legal casino revenue is just the tip of the India iceberg. Consultant G3-247 puts India’s casino gaming spending at US$30 billion and total gaming outlays, including sports betting, online gaming and passionate playing of rummy and traditional Indian card games among families and at clubs – similar to Chinese and mah-jongg – at US$60 billion.
Indian gamblers have their own style of play and gaming preferences, plus a love of sports betting, and no one offering them a world class product yet
Despite the market’s potential, international interest has been limited. James Packer’s Crown Resorts and a local partner planned to develop a gaming resort in Sri Lanka, the island nation off India’s southeastern coast, until a change of government quashed the project. Sri Lanka has a handful of casinos comparable to what Indians can find at home. Nepal, with a land border on India’s northeast shoulder, offers similar products in Kathmandu, inside four- and five-star hotels. Frontier market specialist Silver Heritage Ltd, which operates Millionaire’s Club and Casino in the Nepali capital’s Shangri-La Hotel, is developing the first of what could be several five-star Tiger Palace resorts along Nepal’s border with India, hoping to attract players from nearby states, just as Macau does with Guangdong and China’s other nearby provinces.
Although India ranks among the top 10 sources of visitors to Macau and Las Vegas, both destinations understandably focus on different gaming cultures. Even Singapore, with a sizeable domestic Indian population and significant visitation, largely ignores their gaming potential. Indian gamblers have their own style of play and gaming preferences, plus a love of sports betting, GMA’s Szybala notes, and no one offering them a world class product yet. He estimates a US$10 billion jackpot awaits operators that meets the challenge, and Silver Heritage seems to be at the head of the line.