SAVING INDIAN RACING FROM COLLAPSE: A WAKE-UP CALL FROM HYDERABAD

 

SAVING INDIAN RACING FROM COLLAPSE: A WAKE-UP CALL FROM HYDERABAD

Once revered as the Sport of Kings and a vibrant weekend institution, horse racing in India is now at a crossroads. What was once a celebrated blend of athletic excellence and regulated betting has been pushed to the brink — crippled by punitive taxation and overshadowed by a sprawling, unregulated underground betting economy.

At the heart of this crisis lies the Hyderabad Race Club, a microcosm of the national trend. In just seven years, official totalisator collections have plunged from ₹1,217 crore in 2016–17 to a dismal ₹141 crore in 2024–25 — a staggering 90% decline. And this freefall is not due to waning public interest. Quite the contrary — racegoers still throng to the tracks. What has changed is where and how they place their bets.

The root of this collapse is the 28% GST levied not just on winnings, but on every rupee wagered. This has made legal betting untenable for most punters, driving them toward illegal betting networks where no such burden exists. Consequently, the money has not vanished — it has merely shifted lanes.

Industry estimates now peg Hyderabad’s illegal betting circuit at over ₹2,000 crore annually, with Bangalore’s underground economy believed to be at least 2.5 times higher. The numbers are staggering — and so is the consequence: huge revenue losses for both race clubs and government exchequers, compounded by a lack of oversight, accountability, and consumer protection.

"No punter has stopped betting," says V. Narender Reddy of the Telangana Race Horse Owners Association. "Thousands still show up every race day. But the money is going elsewhere — into a flourishing illegal market that has grown from nothing to thousands of crores in under a decade."

How Does Illegal Betting Work?

Punters, now priced out of legal pools, are placing bets through closed groups on WhatsApp, phone calls, or via unauthorised third-party apps. Settlements are often done in cash or via informal credit systems. These betting syndicates operate without licensing, regulatory checks, or taxation — creating a parallel economy that is not only illegal but increasingly difficult to dismantle.

The Way Forward: From Collapse to Correction

If this continues unchecked, India’s regulated racing framework will crumble completely — with irreversible consequences for livelihoods, breeding farms, trainers, jockeys, veterinarians, and thousands dependent on the sport.

A multi-pronged, high-level intervention is urgently needed.

1. Rationalisation of GST

  • The 28% GST on every rupee staked is a death sentence to legal wagering.
  • A feasible alternative: tax only on net winnings, as is the global norm (e.g., UK, Australia, Hong Kong).
  • A lowered GST slab (between 5–12%) can redirect punters back to official channels, increasing transparency and government revenue.

2. Recognition of Horse Racing as a Distinct Economic Sector

  • The sport is not merely entertainment; it is an ecosystem involving agriculture (breeding), rural employment, sports, tourism, and taxation.
  • Racing must be treated as a regulated skill-based industry, not lumped indiscriminately with games of chance.

3. Tech Integration for Transparency

  • Implement real-time online betting platforms with government-regulated digital wallets.
  • Introduce licensed digital intermediaries (as done in Australia or UK Tote systems) to draw users back from illegal operators.

4. Strict Action Against Illegal Syndicates

  • Coordination between cybercrime units, state police, and GST departments to crack down on digital betting rackets.
  • Encourage whistleblowing and offer incentives for reporting illegal betting chains.

Conclusion: We Must Act Now

Hyderabad is not an isolated case — it is a red flag for the entire Indian racing industry. The combination of regulatory overreach and policy blind spots has turned a legal, tax-paying sport into a shadow of its former self.

If we are to preserve the legacy of Indian horse racing and secure its future, urgent tax reforms and regulatory rethinking are not just advisable — they are absolutely essential. The alternative is a silent collapse, with the state losing revenue, thousands losing livelihoods, and the public pushed further into the underworld of illegal betting.

Let Hyderabad be the alarm bell that finally shakes the system out of its slumber.

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