Online Games of Skill Need Adequate Regulation to Stimulate Indian Businesses in the Sector

Indian eSports, Fantasy Leagues and Skill Games platforms are among digital businesses asking for clearer distinction and systemic regulation of the sector. Legislative uncertainty leads to missed opportunities in terms of taxes and business development but it also leaves desi consumers exposed.

Genre Distinction as Basis for Online Gaming Regulation

The Supreme Court has distinguished games of skill as legal and essentially inoffensive ever since the 1960s. Yet, to this day, neither Centre nor States have developed laws and regulations which define precisely which games of our favourite games should be legal, and even less has been done on actual regulation.

As State High Courts across the country have started pointing to outdated laws and their inadequacy in dealing with an exploding online gaming phenomenon, business experts and industry associations have joined forces in urging authorities to establish regulatory standards across the country.

Indian eSports are among the more vocal businesses in the games of skill segment which needs an explicit confirmation of their legality in a larger context of online entertainment regulation. Already exercising an important impact on the Indian economy, the real money gaming segment (RMG) has grown in importance in the daily lives of millions of consumers – especially in light of the series of Covid-related lockdowns and physical distancing norms.

One simple illustration: the ability to enjoy an andar bahar game at a casino such as 10Cric or PureCasino with one’s relatives during the holidays needs a clear distinction from the fantasy league challenges amongst colleagues. Such formal transparency should suffice as a first step in many cases. Nevertheless, leading Indian gaming companies ask for a higher degree of ecosystem stability, much like their global competitors and offshore digital platforms tend to obtain gaming licences abroad and continue operating in a regulated manner.

Indian eSports Leagues and Their Push for Regulation

Online gaming industry associations like the FIFS (Federation of Indian Fantasy Sports), the AIGF (All India Gaming Federation) and eSports League companies repeatedly emphasise the fundamental definition of games of skill as being legal. ESL India encompasses a number of digital sports genres and is immensely popular, providing visibility and revenues to companies like Nazara, a true Bharat giant in the sector.

Yet, industry experts are astounded how Central and State governments simply miss out on regulated tax income and licence revenues, stifling the companies’ growth perspectives in turn. While responsible gaming will also be promoted by clearer legislation and self-regulatory bodies for the main digital segments, the potential for job creation and tax income alone should suffice in convincing authorities to deal with the regulatory gap.

Tentative State regulation has led to contradictory treatments of the subject. Several States have imposed a blanket ban, completely stifling local businesses while not being able to cut access to legal offshore gaming platforms online. Some, like Maharashtra, consider legalising the entire sector. In between, Kerala and Karnataka governments have been prompted explicitly by their Courts to pursue contemporary regulatory standards.

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Hopefully, the recently announced draft Guiding Principles for national-level regulation of online fantasy sports – a proposal by Centre’s policy think tank NITI Aayog – is only the beginning of a consistent push in the right direction. Private business operators in the sector and the public interest are better served by a clearly defined playing field and a regulated online entertainment sector.