How a Central Law in the Skill-Based Online Gaming Sector Can Benefit the Entire Industry

The online gambling industry is thriving in many parts of the world, with India emerging as a global leader. According to EY report, the total number of online gamers in India increased by 8% from 360 million in 2020 to 390 million in 2021 and by 2023 the number of gamers is expected to exceed 450 million.

The online gaming industry is categorized into three main segments: real-money gaming, electronic sports, and casual gaming. Real money gambling is a type of online gambling in which real money is wagered on the outcome of the game. Players need cognitive skills such as concentration, critical thinking, memory, working out strategies, quick decision making, wonderful hand-eye coordination and so on. E-sports are competitive video games played online between professional players, individually or in teams. Casual games are designed to attract new players interested in simple games and they involve a minimum of skill.

While the online gaming industry as a whole has evolved considerably and now includes a variety of players, the regulations that govern these games are few and far between. According to the constitution, the industry is regulated by each state. Currently, the industry is also self-regulated and governed by comprehensive charters and audits. Without a robust central framework, the different state interpretations of online skill-based real-money games make it difficult to scale the business.

It is encouraging that many Indian states have realized the responsibilities undertaken by gaming companies to promote responsible gambling in addition to past orders from various honorable courts clarifying the difference between a ‘game of skill’ and a ‘game of chance’. “. . However, in the last two or three years, some Indian states like Kerala, Tamil Nadu and others have imposed a law banning real money online gambling. However, Hon’ble Madras High Court later overturned the ban followed by Kerala lifting the online rummy ban. Similarly, other states like Punjab, Haryana, Gujarat and Maharashtra have ruled in favor of skill-based real money gambling industry.

Over 15,000 game developers and around 300 million gamers make up the online gaming industry in India. There are currently over 400 gaming companies in operation, and the industry is considered more than just entertainment. Players felt that their cognitive skills, including concentration, objective thinking, and time management, improved significantly.

With advancements in technology, developers were able to create a truly immersive gaming experience and gamers were able to achieve favorable results. Moreover, there are players who even seek the online gaming platform as a language learning tool, improving soft skills and a way to socialize, thereby building meaningful relationships. According to a report by technology company HP India, more than 90% of respondents see online gaming as a viable career option.

Considering the potential of the sector, the government has set up a task force as outlined in the Finance Budget 2022 to create an apparatus to develop the industry as an opportunity for job creation. I believe that a regulatory framework will allow the industry and players to grow in a systematic way as it would bring the required level of compliance as well as transparency and trust with all stakeholders. On top of that, certainty and definite growth will further boost investor confidence in the long-term development of the sector, boosting foreign direct investment, which is critical to the success of the industry.

Online gambling is a fairly well regulated industry globally. Many countries, including Canada, the United Kingdom, Mexico, the United States and the European Union, have put in place a structured and concrete legal framework that allows for structured growth of the industry and supports governments in their vision to create and develop their economy. .

The online gambling industry in India is expected to generate revenue of over Rs 29,000 crore in 2025 with over 65 crore users. The industry will also play a vital role in achieving Digital India’s vision and fueling the country’s goal of becoming a $5 trillion economy by 2025. Therefore, I strongly believe that a push of the supreme government will act as a catalyst for growth and development. of this booming sector.

A legislative framework should be established and different types of industry self-regulation should be formed and promoted. This authority could be responsible for managing the online gambling industry, monitoring its activities, preventing societal problems, protecting consumers and combating illegality and crime.

While national, progressive and comprehensive policies for online gambling are needed in India, local governments and enforcement bodies need to work with the industry to establish best practices and encourage responsible gambling.



The opinions expressed above are those of the author.


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