Gaming
Clearing the confusion about Sikkim Online Gaming licenses
Over the past few days, I had received numerous queries on obtaining licenses in Sikkim and also whether Indians can place wagers on these websites. We now have clarity on various issues concerning Sikkim licenses. The Sikkim government has issued Letter of intent (LOI) in favour of various companies. An LOI can be converted into a Provisional license (on payment of a fee of Rs. 1 lakh) by issuing a Rs. 5 crore bank guarantee in favour of the Sikkim government (which is the minimum yearly assured taxes to the Sikkim government).
The provisional license is issued for 120 days to enable companies to set-up the necessary infrastructure for setting-up the website after which an application for the actual license can be made on payment of a fee of Rs. 5 lakhs. The term of the license is 5 years with an option to renew it thereafter.
A few companies, representing the Sikkim government have been issued Letter of Intent’s for the online gaming activities and want investors to purchase equity in the company and start the process of building the infrastructure for the online gaming licenses. The average price for giving 100% equity in the company having Letter of Intent to carry out the online gaming business is Rs. 10-15 crores.
I would now clear certain fundamental doubts relating to investing in Sikkim licenses and the online gaming business:
Investment by foreign companies: Any foreign Direct Investment (FDI) including technical collaboration for gaming, businesses is prohibited in India; however given the considerable interest of foreign gaming companies and the cutting-edge foreign gaming technology; businesses would like to have some sort of an arrangement with fordeign entities. Some businesses are confidant that transactions can be innovatively structured to allow foreign companies to share technical expertise and/or hold a stake in the license-holding company.
Participation from other states and payment gateways: Businesses would be able to market their websites in most states in India in the absence of any explicit ban. In fact, sources tell me that the Central government and certain State governments have given informal permission to allow gambling activities to be carried on. Thus, customers would be able to wager through numerous payment options like cash cards, cheques, etc. Requests are also pending with the Reserve Bank of India Winnings could also be transferred to the customers bank accounts.
In fact some of these websites are likely to start operations in a few months after the required infrastructure is set up and formalities are completed.
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Ankita
February 2, 2011 at 6:01 am
Can you please help me by telling me whether bank transfer for the puroses of online gaming- legal and specifically permitted for Sikkim region?
Secondly can the ewallets can be used for online gaming by the Licensee or cash card mode is better?
Jay Sayta
February 2, 2011 at 10:09 am
Payment options depends on how the licensees market their products…However, in the absence of any explicit ban/prohibition by other state governments both bank transfers and e-wallets should be available.
Anish H. Lakhani
February 3, 2011 at 10:02 am
None of the standard online payment options like debit, credit cards, bank transfers, cash cards are allowed to the Sikkim License holders. RBI has denied it.
Ed Lecanard
March 4, 2011 at 7:43 pm
Jay,
Has the Sikkim government publicly announced who they have awarded the online gaming licenses to and how many licenses have been awarded in total?
Have any of the foreign operators (such as Betfair / Bwin / William Hill / Ladbrokes) been awarded licences, or just Indian operators (such as Playwin)?
Thanks
Ed.
Jay Sayta
March 4, 2011 at 9:47 pm
As of now though the names of actual buyers is not out in the public domain and none of the websites have started their operations. However, sources say that around 8 provisional licenses have been issued, notable license holders being Playwin and Damani group. Foreign Direct Investment (FDI) in any gambling related business in India is prohibited, so Betfair and other foreign companies can technically not hold licensees. It may however be possible through structuring that these foreign gaming websites own certain equity in Indian companies that have the licenses.
Ed Lecanard
March 4, 2011 at 10:48 pm
Thanks Jay, that’s interesting.
Do you know of any other local operators that were bidding and may have been successful? For example, Future Gaming or the Indian arm of technology company Agilsys Managed Services, who were mentioned in news articles linked to the process in the past. Any others?
Ed.
Jay Sayta
March 5, 2011 at 11:06 am
There is no such information about the operators you mentioned in the public domain. But I am in touch with certain other Indian companies intending to procure the Sikkim license (having the letter of intent) and on the verge of completing formalities to start the business. Drop me an email if you are interested in knowing more or working in the venture in any way.
neelu
July 2, 2011 at 5:54 pm
hi jay
want to know more on the topic
can you gimme your email id
Jay Sayta
July 2, 2011 at 8:17 pm
You can contact me on my email address jay [at] glaws.in if you wish to discuss anything.
avi
January 23, 2012 at 6:53 pm
hey
jay can u give me avdetail of this plz
Suresh Kumar
March 11, 2011 at 6:40 pm
As of today March 11th, 2011 four such provisional licenses (for Online Gaming, Sports Betting & Horse Race Bettin) have been issued by the govt. of Sikkim to three applicants viz. Playwin, Martin & Sugal-Damani.
Two more may get issued shortly, but Future Gaming & Aglisys are already out of this race.
Ladbrokes, 888.com, B.Win & Betfair had earlier (in year 2009) tied-up with the Indian Applicants, but on being confirmed that FDI is not allowed, they all went back.
Jay Sayta
March 12, 2011 at 9:51 am
Thank you for the info. Can you also tell us the source of this info and also whether all such information is available in the public domain?
Suresh Kumar
March 12, 2011 at 11:42 am
Past one & half year, I have been closely following it on day to day basis.
Most probably Big Star, Nayuma Infosys and Ghoshing Torrent are the three strong contenders awaiting the license.
Suresh Kumar
March 12, 2011 at 11:43 am
Also Online Gaming includes Poker & all other online casino games.
Ray
March 15, 2011 at 11:21 am
Hi Jay
would u know of a consultant who can make a presentation on all aspects of the licence. we are looking into entering the online gaming business.
Sai narayan
March 25, 2011 at 3:19 pm
I hold a Letter of Intent and shall be receiving the provisional licence for the Sikkim online gaming .I need a full presentation on setting up the first terminal in Gangtok and start up from there.Any views or advise would be welcome.
We can also dicsuss financuial terms for the same.
regards
Sai
shekhar
May 9, 2011 at 1:06 pm
sir
what is the toatal cost for online gambling license.
Jay Sayta
May 9, 2011 at 2:56 pm
The cost of fully incorporated company having letter of intent is around 15 crore rupees. You have to pay another 6 lakh rupees as fees and issue a 5 crore rupees bank guarantee to the Sikkim government as minimum assured earnings from online gaming in one year.
Sreedhar Reddy.N
July 18, 2011 at 11:07 am
Hi Jay.S
Thank you for the above comments that ur adivsed to evrey 1 but like u said 3 of them have already been issued licence, Martin group, Playwin, Sugal-Damani were this companys can start there business in sports betting in any sort of sports. Till now this company they did not even start the sports betting so are they coming up for online sports betting?? how long does it take??
Jay Sayta
July 18, 2011 at 4:42 pm
Yes, some major players have acquired the Sikkim online gaming license. However, as you would know if you have read my next post on the Sikkim online gaming licenses, you would know the legal problems which the major players are facing in starting the online gaming operations. The link to the latest post is http://glaws.in/2011/05/the-farce-called-sikkim-online-gaming-licenses/
Jay Sayta
July 3, 2011 at 12:10 pm
Owing to the unfavourable legal conditions, the Sikkim online gaming license are a wait and watch at the moment.
avi
January 23, 2012 at 6:55 pm
plz help me and give me a full information about betting is legalled in sikim
Jay Sayta
January 23, 2012 at 6:57 pm
Please email me with your details.
Jay Sayta
January 23, 2012 at 7:07 pm
Hi Thilak- The online gaming websites from Sikkim are facing legal difficulties at present and are unlikely to began operations anytime soon. I will keep all of you posted on the developments through new posts.
prasad valavala
April 9, 2011 at 1:18 am
i pray to god for start cricket betting license in sikkim (india) as soon as ..thank you for all robos.
sreedhar Reddy
April 9, 2011 at 1:45 pm
When can we start betting online… from online betting sites from India/sikkim or from any other state… can we expect this year or is it going to drag on again
Jay Sayta
April 9, 2011 at 3:52 pm
It all depends on the manner in which the companies trying to start the business get regulatory permissions from RBI and other government bodies. One may expect it to start by this year if all goes well.
Prashant Mali
April 13, 2011 at 5:25 pm
With IT Act, 2000 having extra territorial jurisdiction , sikkim online gambling is a wait and watch game in another states.
Sahil Rohmehtra
May 10, 2011 at 7:37 pm
Hi Jay,
I am slightly unclear as to the amount that has to be paid to the government. To my understanding, one needs to pay Rs 1 Lakh to secure a provisional licence, then after 120 days, if requirements of infrastructure met, then Rs 5 Lakh Licence fee, alongside a security deposit of Rs 5 Crore. Then post that a minimum tax of Rs 50 Lakh, at 10% interest subjected to further changes imposed.
Is my understanding correct? If so, what are the security deposits, i.e. is it in the form of a collateral, and under what condition is it confiscated by the govt. is it if taxes not paid?
Also, u do mention that there is no FDI permitted, but firms may carefully restructure to bring in foreign companies as relevant stake holders, could u please throw some light on that please.
Thank you and regards
Sahil
Jay Sayta
May 10, 2011 at 9:40 pm
The security deposit of Rs. 5 crores should be in terms of a bank guarantee. 5 crores is the minimum assured payment to the Sikkim government by way of taxes, i.e. 10% tax of Rs. 50 crores.
If you fail to get the amount of Rs. 50 crores as payment from participants etc. or in any case if you are not able to pay the 5 crore tax; even then the Sikkim government is assured of the 5 crore rupees.
Ashish Agarwal
May 18, 2011 at 11:22 am
Hi Satya. your information is helpful. We are interested to start this. could you please tell me. in case if We don’t take license directly from Sikkim Gvt., could we have kind of association with license holders? kind of sub-dealership or can they sub license us? and please mention your contact number also. if its comfortable for you.
Jay Sayta
May 18, 2011 at 11:48 am
Hi Ashish,
Thanks for your comment. Forms of sub-licensing as such are not given by the Sikkim government as such, because only one website can be operated per license. The Sikkim government is not yet following the Curacao model of master and sub-license, however you are free to have affiliations/associations with the license holder in various aspects like marketing, technology etc.
Jessica
June 1, 2011 at 3:03 pm
Jay,
Is the final list of online gambling license holders publicly announced? Which gaming aspects of the online gamine license include sportsbook? casino games? poker? lottery?
Jay Sayta
June 1, 2011 at 3:19 pm
Dear Jessica,
Licenses are still available and the Sikkim government has indicated that it will issue more licenses. I know that at lease around 10 letter of intents (LOI’s) have been issued and three-four licenses have been issued to major Indian players like Martin group, Playwin, Sugal-Damani. The license holder can carry-out casino games, poker, sports-betting but there is a separate license for lotteries.
Thilak
August 24, 2011 at 11:31 pm
hi Jay, I am alreading betting with Interntation website, BET365.COM, and also, I won 1000USD. How can I transfer tat fund to my bank account? Is it illeagal to recieving winning fund in bet in India. Can I use that fund in India? Plz reply.
avi
January 23, 2012 at 7:01 pm
thilak meri b yehi problem hai agr tmhe kuch solutionmil gya ho to bhai plz help me,bht dino se mai isi tension me hu yar
avi
January 23, 2012 at 7:03 pm
mera nbr hai 919759347003
Mythili
January 24, 2012 at 1:30 pm
Hi Thilak,
You can try and get this money transferred through Netteller or Entropay. They charge you a certain sum but I have found it is the few options available to Indians
Niren
September 6, 2011 at 1:13 pm
Hi May i know ? when will be the Online licensee issued to Gushing torrent n Nayuma infosis
vansh sapru
February 2, 2012 at 1:45 am
Any news on the online license yet?