South Asia’s iGaming industry is emerging as one of the fastest-growing digital entertainment markets in Asia, supported by rising smartphone adoption, digital payments, and expanding internet access. At the same time, governments across the region are increasing oversight of online gaming platforms, strengthening tax compliance measures, and stepping up action against offshore operators as the sector expands.
“The bans in South Asia did not kill the industry but proved how real the demand was,” said Japneet Singh Sethi, an iGaming strategist, in an interview with SiGMA News on the sidelines of SiGMA Asia 2026. “This is not one market but a cluster of economies moving in the same direction.”
India drives the region’s gaming growth
India remains at the centre of South Asia’s gaming economy. The country’s large smartphone user base, expanding digital payment ecosystem, and growing appetite for online entertainment have created a strong foundation for gaming platforms.
“This is not one market but a cluster of economies moving in the same direction.”
– Japneet Singh Sethi, an iGaming strategist
The Lumikai State of India Interactive Media Report 2025 estimated that India has more than 590 million gamers, making it one of the largest gaming populations globally. The report also identified gaming as one of the biggest contributors to India’s interactive media economy.
Industry executives believe the region’s growth potential extends well beyond India.
Satyendra Atre, Business Development Manager at BETBAZAR, told SiGMA News during SiGMA Asia 2026 that South Asia is becoming one of the industry’s most strategically important growth regions because of its demographic scale, mobile adoption, and engagement with digital entertainment.
According to the SiGMA Asia Market Report 2026, Asia’s iGaming market generated an estimated $45.5 billion in revenue between April 2025 and March 2026, with 155.7 million active players across 28 markets. The report found that consumer demand continues to outpace regulation across several Asian jurisdictions.
“Markets like India, Bangladesh and Sri Lanka are seeing strong growth in online gaming engagement, especially around cricket and real-money skill games,” Atre said.
The SiGMA Asia Market Report identified India and Bangladesh as two of Asia’s highest-engagement gaming markets despite the absence of comprehensive online gaming regulatory frameworks in both countries.
Governments increase regulatory scrutiny
As online gaming expands, governments across South Asia are tightening oversight of the sector. India recently implemented a more stringent framework for internet gaming, introducing stricter age-verification requirements, enhanced compliance obligations, and greater oversight of real-money gaming companies. Authorities have also stepped up efforts to combat unapproved offshore platforms and illicit betting networks.
Regulatory pressure intensified this week after the Supreme Court of India upheld the retrospective application of a 28 per cent Goods and Services Tax (GST) levy on online gaming, fantasy sports, and betting platforms. The ruling reinforced the government’s position that real-money gaming involving stakes falls within the GST framework.
“Markets like India, Bangladesh and Sri Lanka are seeing strong growth in online gaming engagement, especially around cricket and real-money skill games.”
– Satyendra Atre, Business Development Manager at BETBAZAR
The ruling resulted from a protracted disagreement over whether platform fees alone or the entire face value of wagers and entry fees should be subject to GST. The Supreme Court upheld the levy’s retroactive applicability while ruling that even skill-based games take on the characteristics of betting and gambling for GST purposes when money is staked on unpredictable results.
The decision is expected to increase financial pressure on gaming companies as tax authorities move ahead with recovery proceedings across the sector. Industry estimates suggest companies could face substantial liabilities tied to past transactions.
Regulatory developments elsewhere in South Asia
In Sri Lanka, authorities introduced higher betting and gaming levies from January 2026, increasing the gross collection levy on gaming operators from 15 per cent to 18 per cent while doubling casino entrance fees for local citizens.
Bangladesh continues to face growing offshore gaming activity despite the absence of a comprehensive online gaming framework. Industry reports have identified the country as one of the region’s highest-engagement gaming markets, highlighting the challenge regulators face as consumer demand increasingly shifts to cross-border digital platforms.
The developments reflect a broader regional pattern in which governments are balancing rising consumer demand for online gaming with concerns around taxation, financial oversight, consumer protection and offshore market activity. Industry participants say long-term market stability will depend on clearer regulatory structures. According to Atre, sustainable growth will require “regulatory clarity, responsible gaming standards, localised user experiences and strong payment infrastructure”.
Offshore operators continue attracting users
While regulators increase enforcement efforts, offshore operators remain a major challenge across the region. The SiGMA Asia Market Report highlighted growing offshore and shadow-market activity in several high-demand jurisdictions, including India and Bangladesh. Cross-border operators continue reaching users through digital marketing, affiliate networks, and localised payment systems.
Recent industry discussions have also focused on the rise of offshore betting advertisements targeting Indian consumers despite restrictions on online money gaming promotions. The Advertising Standards Council of India (ASCI) recently flagged continued growth in offshore betting-related advertising activity.
Payments and compliance become the industry’s priority
As regulatory scrutiny increases, payment infrastructure and compliance systems are becoming central to operator strategy. Industry leaders increasingly view payments, identity verification, and fraud prevention as critical components of long-term growth.
“If you build a beautiful product but nobody can use it, you don’t understand the business,” Sethi said. “The real business has always been payments and compliance. The operators who solved payments and compliance-built moats while others lost the market.”
Atre believes the industry is moving beyond a content-first model. “The future of iGaming is no longer defined only by casino content,” he said. “It is being shaped by payments, compliance, data security and trust infrastructure.”
Atre added that operators capable of delivering secure transactions, strong Know Your Customer (KYC) and Anti-Money Laundering (AML) standards, fast payouts, and regulatory transparency are likely to gain a long-term competitive advantage.
The importance of these areas is also reflected in industry investment trends. Payment providers, compliance technology firms, and identity-verification companies are becoming increasingly important across the gaming ecosystem as operators adapt to stricter regulatory requirements.
No clear gaming hub has emerged yet
Despite the region’s growth, industry executives do not believe South Asia is close to establishing a fully regulated gaming hub.
“No South Asian country is close, and we should not even pretend,” Sethi said. “Some countries do have conditions that have historically preceded regulation, but they are yet to find their political alignment.”
Rather than focusing on a single regulatory destination, Sethi believes operators should build operational capabilities that allow them to adapt quickly as policies evolve across different markets.
The opportunity remains substantial. South Asia combines one of the world’s largest mobile-first populations with rising digital payment adoption and growing demand for online entertainment, making it one of the most closely watched growth markets in global iGaming.
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