Business Plan GREEN GAMBLING

Submitted By: Ankur Dutt (PGP26076) Tanu Gulati (PGP26177) Vaibhav Kukreja (PGP26181)

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III. C. VI. II. D. B. Product Description Methodology Strategic Advantages Concerns IV.. V.. Market Potential ……………………………………………………10 Financial Analysis………………………………………………….4 Concept ………………………………………………………………7 A. Conclusion……………………………………………………………15 2 ..11 Role of Government…………………………………………………15 VII. Purpose……………………………………………………………….3 Opportunity…………………………………………………………..Table of Contents I..

doing so reduces the scope of the underworld to exist b. The secondary purposes which the venture is expected to serve are: 1) Legalize the concept of gambling by making it a more constructive exercise as per the new format – a. especially problem gamblers to switch to green gambling while discouraging people from going abroad to gamble away India’s wealth in foreign land 4) Provide multiple options of investment to the winning party(s) such as partnership/ownership in green ventures/projects. which is a green casino. 3 . will be used in a more constructive format while retaining the thrill associated with the game. investment in social causes and investment in infrastructure projects 5) Provide an incentive even to the losing party(s) by giving away a certificate of appreciation for giving away their money for a good cause/project 6) Contribute to the overall economy of the country by providing employment opportunities (direct as well as indirect). transportation – taxis. Conventional gambling. is to help garner monetary support for upcoming green projects in India. via this mode of gambling people will either bet for ownership in a green project (eco friendly) or invest (full or surplus accumulated through gambling) in a social cause. which otherwise has more harmful consequences.). revenues would then go to the government instead of the black economy 2) Provide a socially responsible form of entertainment to wealthy individuals 3) Encourage gamblers. Purpose Green gambling is a concept similar to plain gambling but involves equity in green and social projects instead of money.I. The primary purpose of starting this business venture. etc. paying taxes to the government and promoting tourism 7) Encourage entrepreneurship in green gambling and bring healthy profits for the casino/gambling industry as well The fact that rich and wealthy individuals prefer to spend money on activities that give them pleasure and entertainment is being exploited by this concept of green gambling. In other words. promoting spending in associated businesses (such as food and beverage.

While India’s achievement is commendable. it does provide entertainment to gambling enthusiasts worldwide and there is a demand for this form of entertainment – a demand which the green casino wishes to capitalize. There is a demand for such a form of cricket and the IPL capitalised on this passion. However. which is much lower than that of developed countries like USA. A transition from conventional energy systems to those based on renewable resources is necessary to meet the ever-increasing demand for energy and to address environmental concerns. Our achievement so far is about 10406. this figure is expected to rise sharply due to high economic growth and rapid industrialization. the fact is that it provides three hours of excitement and entertainment to millions of cricket enthusiast worldwide. Opportunity “Irrespective of how one feels about the IPL. It is rumoured that thousands of crores are wagered on every single IPL match and that it is a transnational industry. Irrespective of how one feels about gambling.” Going by the above example of IPL. What is. Australia. green gambling proposes to change the format of gambling. as against global installed capacity of approximately 200000 MW of renewable electricity generation. Instead of acknowledging the desire to gamble and providing safe institutional machinery.69 MW. India has huge potential for producing electricity from renewable sources.II. we whine about it. The consumption of electricity is growing on the worldwide basis. Casinos are a rage world over. per se. Energy is a necessity and sustainable renewable energy is a vital link in industrialization and development of India. which changed the format of cricket and turned it into a huge success. Most of the power generation is carried out by coal and mineral oil-based power plants which contribute heavily to greenhouse gases emission The average per capita consumption of energy in India is around 500 W. Scope and Need for Green Projects in India India is heavily dependent on fossil fuels for its energy needs. wrong with betting is the fact that it has not been legalised to collect some taxes. it is necessary for us to keep pace with the fast growth in developed countries. Japan etc. Europe. 4 .

According to the World Wealth Report recently released by Capgemini and Merrill Lynch Wealth Management. etc. places it at about 45.000 MW is already available for exploitation in the potential States. Assuming a grid penetration of 20%. we know that government hardly delivers on promises made in policies. wind farms in the South. “Mapping of resources.businessmen. There are three imperatives that necessitate a transition to a sustainable energy system in the 21st century:    Climate change and its potentially disastrous consequences Peaking of production. young blue collar workers. Survey work is in progress in 24 States / UTs. depletion and extinction of fossil fuels. Just one per cent of the country’s land area can meet its entire electricity requirement till 2030.India’s varied geophysical layout levels makes it possible to cater to a variety of projects. This is the time when action is required and all initiatives in this particular direction should be undertaken at their earliest. more investment in R&D and adoption and commercialization of clean technologies is obviously the next step forward for India” – INFA Growing number of High Networth Individuals in India The need for investment in various green projects can be met by involving the wealthy class of individuals . Indian green industry is still in nascent stage. The States of Rajasthan and West Bengal have also shown wind potential recently. Scientific surveys are being intensified to identify specific viable and potential sites for tapping wind power. and Energy Autonomy/ Independence There is a growing world-wide concern of increasing carbon emissions and the need to develop clean energy projects. For example. A recent study undertaken to re-assess the potential. geothermal and small hydroelectric projects in the North and North-East and solar power in central and south could be further developed. India receives 5000 trillion KW equivalent of energy per year through solar radiation. entrepreneurs.000 MW. 160 sites have so far been identified in 13 States. most countries in the world have increased their HNI (High Net-Worth 5 . Also. According to estimates. a technical potential of about 9.

While. offers an opportunity to drive change.Individuals) count. Those criminal overlords are some of the most powerful figures in Indian society. Online gambling is now allowed in the Himalayan state of Sikkim. India's burgeoning online audience. however. Presently very few casinos in India Gambling is illegal in all but two states in India and the underground nature of the operation means it is largely controlled by organised crime gangs. India has more than doubled it – maximum compared to any other country in the world. 6 . with British firms Betfair and William Hill having bid for licences.

Holiday Inn Resort Goa (with Casino). Salcette. Mobor Beach. via this mode of gambling people will either bet for ownership in a green project (eco friendly) or invest (full or surplus accumulated through gambling) in a social cause. Giving an option to the rich and wealthy to hold stakes in green projects and invest in social causes. Ramada Caravela Beach Resort and Casino Goa Nugget. These ideas will be carefully examined by panel of experts for confirmation of economic viability. Hospitals . This would provide convenience and space to investors. Goa 4. In other words. Vainguinim Beach. Other options of investment such as funding of infrastructure projects. Cidade de Goa Beach Resort and Goldfinger Casino. 1. Concept Green Gambling Green gambling is a concept similar to plain gambling but involves equity in green and social projects instead of money. could also be made available to players upon collaboration with government 7 . Majorda Beach Resort and Treasures Casino.There are 5 listed land-based gambling casinos in Goa. Varca Beach. Majorda. Specific area of investment interest will be specified beforehand by the players. Government can play a role here After listing of projects. Cavelossim-Goa Awaiting 3. Schools. Goa 2. Salcete. Goa III. Product Description The concept of green gambling would work in the following fashion:       Economically viable ideas will be invited from people and those available with the govt. etc. categorization of projects will be done on the basis of sector.

the concept of Green-Casinos and Green gambling would be extended to the online format and dedicated portals would be developed to facilitate online Gambling. Methodology Money required will be broken into small units.000. Break into 6500 units each of INR 100.   Collection of INR 65 million or less in this way. 8 . Distribution of these units to those investors who had registered for the sector C. Example   Assume INR 65 million is required for a project X taken from sector C. And then commencement of project depending on collection amount. winner would be given an option to take home the cash with which he/she played in the first place and invest the extra earnings  Over a period of time.  All participating parties would be given an incentive in terms of tax benefits on the money invested via green gambling To encourage participation in green gambling further.

since no cash is directly involved. Strategic Advantages          Promote moderate addiction. Value of unit is not to be changed with time to prevent speculation.  Invite players to start gambling. It would encourage entrepreneurship as well as drive R&D in the green sector. This would provide opportunity to the government to garner investment in green projects while regulating problem gambling. Singapore which Indians visit for gambling purposes Key Concerns 9 . Gambling money will be diverted to constructive purposes. Public trading can be allowed once the project gets completed. 7% to gambling house owner. 8% of the ownership to idea giver. Players will gamble for 85% or less equity in the project. Gambling will take place among groups which can differ in size. Other advantages offered by this form of gambling will be additional casinos leading to employment generation and increase in the revenues of the industry. Green gambling is a business model that substitutes the need for conventional venture capitalists. Thailand. It would help in boosting tourism in the country It would lead to a reduction in Black Money by allowing people with such money to come out and invest in social causes. It would prevent the outflow of billions of rupees that India loses every year to countries such as Hong Kong. Value of units linked to profit of the project.

According to estimates.China and India will become the most attractive countries for investment in renewable energy projects by 2012. Scientific surveys are being intensified to identify specific viable and potential sites for tapping wind power. places it at about 45. Market Potential The number of millionaires in India rose 22. geothermal and small hydroelectric projects in the North and North-East and solar power in central and south could be further developed. Survey work is in progress in 24 States / UTs.7 percent to 130.000 MW. Indian green industry is still in nascent stage. According to Ernst & Young’s estimate . Assuming a grid penetration of 20%. The States of Rajasthan and West Bengal have also shown wind potential recently. the threat posed by substitutes such as online gambling portals would be significant.3 percent growth in China. wind farms in the South. a technical potential of about 9.000 MW is already available for exploitation in the potential States. India’s varied geophysical layout levels makes it possible to cater to a variety of projects. followed by a 20.000. 160 sites have so far been identified in 13 States. IV. India receives 5000 trillion KW equivalent of energy per year through solar radiation. For example. the highest year-on-year increase in the world. 10 . Just one per cent of the country’s land area can meet its entire electricity requirement till 2030. A recent study undertaken to re-assess the potential.     Will this involve enough social gamblers? How to deal with IPR issues arising out of this exercise? How will we tap the people who gamble not just for the thrill but for the immediate monetary returns? Opposition from conservative sections of the society Cost concerns arising from online gambling – Since setting up of a Casino requires a huge capital investment (to the tune of hundreds of millions of dollars).

  Financials Total number of millionaires in India = 130.5% 14% 15.5% Data gathered from various sources US $1-$5 million US $5-$10 million US $10-$20 million US $20-$50 million US $50 million and above Total = 130.000 100 Source: Study conducted by Mckinsey And Company  Break up of interest in green projects Income groups in India Percentage of group interested in green projects 17% 13.35 million (Source: MNRE site) 11 .4% 16% US $1-$5 million US $5-$10 million US $10-$20 million US $20-$50 million US $50 million and above Above data has been interpreted from online surveys by NPD Online Research  Average cost of a green project = $1.5% 19% 11% 3.000 Break up of millionaires in India Income groups in India Percentage of total millionaires 39% 27.V.

9% 19.4% 13.2% 5.868 324.1% 8.710 221.e.484 138.614.91% .e.563. percentage of group interested in gambling and variable B i.3% 100% Key Assumptions  Distribution of the ownership in the project has been assumed as following:  Independence of variable A i.5% 12 Income groups in India Percentage of group willing to green gamble (column 2 X column 3) US $1-$5 million US $5-$10 million 32% 29% 5.500.487.655 85.035.772. Casino revenues from 17 locations for revenue breakup Department Gaming Rooms Food Beverage Other Total Revenue Amount (in $) 898.668.44% 3. percentage of group interested in green projects Percentage of group interested in gambling (A) Percentage of group interested in green projects (B) 17% 13.542 1.261 Percent 53.

4% 16% 5.2% 2% $181.77% 1.7 million .8 million $315.7 million $1.US $10-$20 million US $20-$50 million US $50 million and above 38% 44% 49% 14% 15.32% 6.32% 1.533 billion US $1-$5 million US $5-$10 million 39% 27.533 billion Cost of a green project = $1.9% 19.35 million No of green projects gambling amount can support = 1130 (approx) Total number of casinos = 15 (in major cities) Total Revenue (from all sources) Department Gaming Rooms Percentage of income contributed 53.000 19% 5.7million $205.5% 5.533 billion $ 551.3 million $474.84% Revenue from Gaming Income groups in India Percentage of total millionaires Percentage of group willing to green gamble Percentage of Net amount net worth willing willing to to spend in gamble gambling 2.91% US $10-$20 million US $20-$50 million US $50 million and above Total = 130.5% 7.6% 11% 6.4% 3.3 million $356.44% 3.84% 1% 100 Total Gambling amount = $1.77% 7.4% 13 Amount contributed $1.

3% 100% $375.165 billion Breakeven point analysis Growth in Revenue Growth in costs 22. the equation becomes Total income from gaming income (average period is 5 years) = $1. breakeven point comes out to be around 7.Food Beverage Other Total 13.1% 8.2% 5.4 million $145 million $236 million $2.118 million After calculation.07/15 = $7.5 years 14 .311 billion*0.7 % 10% Breakeven point for a hotel casino will occur after n years where n can be computed by the following calculation Assuming 7% share of casino owner in the green projects and mark up of 7% on other sources of income.15 million Total income from other sources = $1.844 billion Cost analysis Fixed costs per casino Variable costs per casino per year Total costs per casino Total costs for all casinos $130 million $81 million $ 211 million $3.07 = $6.533 billion*0.

VI. Certainly green industry has a bright future and gambling is a big industry in most developed economies. Machines and building material at low cost. Conclusion Green gambling is really viable and attractive. marrying the two at an early stage of a developing economy could bring significant returns for the country and both industries. The idea can be implemented with the proper support and involvement of government and active participation from the public and corporate sectors.e. Tax holidays can be given to such green projects. 15 . Role of Government Government of India can make the idea more attractive by facilitating with      Capital assets such as land on lease. of corporate world. VII. By giving tax incentives to investors and the one winning the money. therefore. Help in creating the potential network i.