[Sansad TV] Perspective: Online Gaming- Landscape & Regulation

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Context

  • Last month, the government announced setting up of a committee to regulate online gaming and to identify a ministry to oversee it.
  • In this article, we will discuss about the growing landscape of the online gaming industry in India and the need for regulation.

Why in news?

  • During the Budget session of Parliament, The Online Gaming (Regulation) Bill, 2022 was introduced in Lok Sabha a member from Kerala as a Private Member’s Bill.
  • The Bill sought to maintain integrity in online gaming and introduce a regulatory regime for online gaming.

Online gaming sector in India

  • In the past few years, India’s nascent online gaming industry witnessed an unprecedented rise, catapulting it to the top five mobile gaming markets in the world.
  • Registering a growth rate of 38%, online gaming is the next sunrise industry.
  • Currently, there are more than 400 gaming companies in India, and it is home to 420 million online gamers, second only to China, according to an analysis by KPMG.

Types of gaming

  • The types of online gaming include:
  1. E-sports (well-organized electronic sports which include professional players) ex. Chess
  2. Fantasy sports (choosing real-life sports players and winning points based on players’ performance) ex. MPL cricket
  3. Skill-based (mental skill) ex. Archery
  4. Gamble (based on random activity) ex. Playing Cards, Rummy

Why is the gaming industry booming in India?

  1. Digital India boom in the gaming industry
  2. Narrowing of the digital divide
  3. IT boom

Other factors promoting the boom

  1. Growing younger population
  2. Higher disposable income
  3. Inexpensive internet data
  4. Introduction of new gaming genres, and
  5. Increasing number of smartphone and tablet users

Prospects of online gaming

  • State List Subject:  The state legislators are, vide Entry No. 34 of List II (State List) of the Seventh Schedule, given exclusive power to make laws relating to betting and gambling.
  • Distinction in laws: Most Indian states regulate gaming on the basis of a distinction in law between ‘games of skill’ and ‘games of chance’.
  • Classification on dominant element: As such, a ‘dominant element’ test is utilized to determine whether chance or skill is the dominating element in determining the result of the game.
  • Linked economic activity: Staking money or property on the outcome of a ‘game of chance’ is prohibited and subjects the guilty parties to criminal sanctions.
  • ‘Game of Skill’ debate: Placing any stakes on the outcome of a ‘game of skill’ is not illegal per se and may be permissible. It is important to note that the Supreme Court recognized that no game is purely a ‘game of skill’ and almost all games have an element of chance.

Need for regulation

  • No comprehensive regulation:  India currently has no comprehensive legislation with regards to the legality of online gaming or boundaries that specify applicable tax rates within the betting and gambling industry.
  • Ambiguity of the sector: The gaming sector is nascent and is still evolving, and many states are bringing about legislation seeking to bring about some order in the online gaming sector.
  • State list subject: Online gaming in India is allowed in most parts of the country. However, different states have their own legislation with regards to whether online gaming is permitted.
  • Economic advantage: Well-regulated online gaming has its own advantages, such as economic growth and employment benefits.

Issues with online gaming

  • Gaming addiction: Numerous people are developing an addiction to online gaming. This is destroying lives and devastating families.  
  • Compulsive gaming: Gaming by children is affecting their performance in schools and impacting their social lives & relationships with family members. Ex. PUBG
  • Impact on psychological health: Online games like PUBG and the Blue Whale Challenge were banned after incidents of violence and suicide.  
  • Threat to Data privacy: Inadvertent sharing of personal information can lead to cases of cheating, privacy violations, abuse, and bullying.
  • Betting and gambling: Online games based on the traditional ludo, arguably the most popular online game in India, have run into controversy, and allegations of betting and gambling.

Why hasn’t a comprehensive law yet materialized?

  • Earlier, states like Tamil Nadu, Telangana, Andhra Pradesh, and Karnataka also passed laws banning online games.
  • However, they were quashed by state High Courts on grounds that an outright ban was unfair to games of skill:
  1. Violation of fundamental rights of trade and commerce, liberty and privacy, speech and expression;
  2. Law being manifestly arbitrary and irrational insofar as it did not distinguish between two different categories of games, i.e. games of skill and chance;
  3. Lack of legislative Competence of State legislatures to enact laws on online skill-based games.

Way forward

  • Censoring: Minors should be allowed to proceed only with the consent of their parents — OTP verification on Aadhaar could resolve this.
  • Awareness: Gaming companies should proactively educate users about potential risks and how to identify likely situations of cheating and abuse.
  • Regulating mechanism: A Gaming Authority in the central government should be created.
  • Accountability of the gaming company: It could be made responsible for the online gaming industry, monitoring its operations, preventing societal issues, suitably classifying games of skill or chance, overseeing consumer protection, and combatting illegality and crime.
  • All-encompassing legislation: the Centre should formulate an overarching regulatory framework for online games of skill. India must move beyond skill-versus-chance debates to keep up with the global gaming industry.

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1 year ago

Since we are talking about games here, maybe there are people here who understand how you can open your own gaming platform? If not difficult, then briefly explain to me where to start in order to build a successful business in this area.

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1 year ago
Reply to  Roman 4711

First you need to take care of quality software. When considering offers from foreign companies, first of all, it is necessary to collect information about the general experience in this field of activity, then study the reviews about the proposed product. You should definitely pay attention to the catalog of games provided, clarify how long the integration process will take and make sure that there are individual conditions for cooperation, a license, and operational technical support. It is not worth saving money on the purchase of online casino software, because only leading manufacturers can guarantee uninterrupted operation.

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1 year ago
Reply to  Roman 4711

An online casino is a profitable business that, with the right approach, will quickly pay back all initial investments and begin to bring a stable profit. However, before engaging in planning, it is necessary to study in detail the procedure and procedure for organizing this type of business, which has its own specifics. The first thing you need to do to open your online casino platform is to choose reliable software providers, then select gaming content for the site, get a license to run a legal gambling business, choose payment methods, create a website for an online casino platform, and understand the marketing and promotion of a new brand. This is in short.

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1 year ago

Using online casino reviews can be very helpful in making the right choice for your gambling needs. These reviews can offer you important information about the casino, including the games offered, the bonuses offered, the customer service offered and the security of the casino. In addition, these reviews can also highlight any unfair terms and conditions that may be in place. These reviews https://playfortunefor.fun/games/3d-slots/ are written by other gamblers who have played at the casino and have experience with the operator.

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11 months ago

Although online gambling may be legal in some states, chances are your web hosting is compliant to avoid legal problems.

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11 months ago

Classifying games based on the absorbed element can be extremely important when selecting laws for online games. However, it must be remembered that the element of randomness is always found in games.

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11 months ago

If you are creating an online game and need to rent a server, be sure that your provider provides the service. For example, supraball server rental may only be allowed in certain states, and chances are that you follow the laws before using certain services.
In addition, it is important to make sure that the server rental provider is reliable and secure before choosing one. You can research reviews from other customers and also check how long the provider has been in the market and what guarantees they offer. It is also worth deciding on the support that the provider provides so that the problem can be resolved quickly. All in all, choosing a server usage provider is an important step that can significantly affect the performance and security of the game.

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