Opinion: Indian Online Gaming Industry needs justifiable restrictions not blanket laws

Gaming industry

Manav Sethi, Chief Marketing Officer, Octro Inc. gives insights into the Indian gaming Industry, sharing how blanket government rules for the industry can stiffle the growth of a potential revenue and job generating sector.

As India extracts itself from the grip of the pandemic that brought the world to a halt for the better part of two years, one industry is poised to zoom ahead.

The Indian Gaming industry, as per Industry estimates, is ready to flex its muscles and grow to $14 billion by 2025.

Helped greatly by the global public health crisis outbreak, India is poised to leapfrog over other countries to become one of the largest online gaming markets in the world. According to Sensor Tower (leading provider of market intelligence and insights for the global app economy), 2020 has been a ‘banner year’ in revenue for the mobile gaming industry, which far exceeded that of the years prior.

The next question is, what was the catalyst that brought about this boom period? We could say the pandemic was the reason, but to be fair, the sector was on the verge of breaking out sooner rather than later.

Macro trends like an increasingly young population, rapid adoption and penetration of smartphones in the country, growth in digital infrastructure, and an increased penchant for digital transactions using payment wallets and the digital economy have also played a vital role in spurring sector growth.

The tailwinds of this growth are visible with the development of better games in terms of content and visual appeal produced by Indian studios, fast-growing interest from domestic and foreign investors, and a focus on content localization. The constant emphasis on improving innovation and technology is helping to bring games alive, which brings more and more users into the fold. 

Despite all these impressive achievements and hard-to-miss statistics, the Government is considering implementing a blanket ban on online gaming, claiming that games with stakes can ruin lives.

In Tamil Nadu, in particular, the Tamil Nadu Gaming and Police Laws (Amendment) Act, 2021, had been passed to ban and criminalize organizing and playing games online, which fell under the gamut of betting or gambling. However, in a game-changing ruling benefitting the sector, the Madras High Court recently struck down the Amendment stating that even if there were stakes involved, it qualified that the player’s skill played the most critical role in the outcome of a game of chance. For a sector like gaming, this landmark judgment brings to the forefront another burgeoning issue that needs addressing urgently; the need for a regulatory framework to guide the industry into the future. 

The time is now to institute regulations

Currently, in India, the regulations for the Gaming Industry are few and far between. Primarily controlled by states, regulations are more a knee-jerk reaction rather than based on a rational premise. In Andhra Pradesh, a few youths racked up vast amounts of unpaid debt playing card games online. Unable to pay their debts, they committed suicide, so the Andhra Pradesh government banned online card games such as Rummy and Poker “to protect the youth”. 

The Gaming industry in India today finds itself staring at a classic dichotomy of the need to bring in regulations while trying to encourage growth. The opinions of the Government were questioned by the Madras High Court judgment stating that citizens of Indian cannot be the opportunity to earn through online gaming because, to win, participants had to demonstrate superior skill and knowledge. 

The Gaming industry has established guidelines to bring a sense of uniformity; the gaming industry has put in place pre-determined time and monetary limits for players. More robust KYC checks and social profiling help determine a gamers’ legal age and financial stability. There are now also strict rules for advertising to promote gaming as entertainment and last annual licensing fees. 

Also Read : Gaming is no longer a stereotyped, niche activity: Interbrand Report 2021

Regulatory Recommendations That Matter

A report from FIFS-KPMG 2020 showed India grossing revenues in 2020 more than three times that of 2019 for online fantasy sports. Keeping a close eye on the sector has been Niti Aayog, who has proposed the formation of a Regulatory Body to focus on regulating online gaming in totality and not just the one genre of Fantasy Games it had suggested. The government of India should establish a regulatory framework to regulate the industry but, at the same time, does not stifle sector growth. 

The ‘Make-in-India’ initiative has provided the industry with the perfect opportunity to showcase skill and creativity to develop online games like Rummy, Ludo, Poker, Teen Patti, Tambola, and Fantasy Games that are at par with international standards.

The line that was once clearly visible between gaming and entertainment has now become blurred, bringing in the need for Government intervention in terms of justifiable restrictions for specific infringements in the Gaming industry. Thus, with Government support in the form of a proper regulatory framework, the industry can become go a long way in becoming a key revenue generator for the Indian economy.

This article is authored by Manav Sethi, Chief Marketing Officer, Octro Inc.



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