A new Reuters report – which cites a government document and three sources – has highlighted that Indian government’s online gaming framework of regulations will be applicable to all real-money online games, encompassing games of skill and games of chance alike. This comes after the Prime Minister’s office overruled a proposal that only games of skill would fall under the regulations, and games of chance will be exempt from the framework.
Instead, the office called for more oversight on all types of games and objected to letting state governments regulate games of chance. According to three people who were directly involved in the rule-making process, the regulations will provide the federal administration with greater oversight on all types of games, while individual state governments will continue to have the liberty to ban games of chance from operating in their states.
The boom in online gaming – especially mobile gaming – since 2020 has not gone unnoticed. And chief among the “level up” in the mobile gaming industry are real-money games, wherein real money is used and wagered on the outcome of the game. Fantasy cricket game Dream11, for one, lets players win cash prizes for real-life matches. Mobile Premier League is another such game that lets gamers earn real money through 1v1 matches and tournaments.
And as the mobile gaming market in India stands to reach $7 billion by 2026 (Redseer), the need for a proper framework of regulations and guidelines for the market has never been higher. In the absence of such a framework and a federal law, the existing IT laws of the country are responsible for the regulation of the online gaming industry in India.
The government has, for quite a while, been working on bringing forth rules and guidelines to regulate this sector, where high-profile investors such as Tiger Global and Sequoia Capital are known to invest in startups that deal with real-money games. Both games of chance and games of skill fall under real-money games.
A report dated August 31 highlighted that a government panel had called for a regulatory framework and a body that will determine whether the game is one of skill or chance – which is a difficult problem to tackle in its own right. To add to this, the proposal of the regulatory framework also included the duties of the regulatory body, which would be in charge of laying down grounds on what qualified as a game of skill, as well as certifying different gaming formats.
The report also proposed measures to address a common issue – addiction of such games by the youth – which often leads to financial losses. As such issues have increased over the years, so have the concern for a framework to regulate the industry.