A new India is devouring online gaming. Over the last few years, millions of new Indian gamers have joined the bandwagon, some just to kill time, others to learn how to make money in their locked-up hours. The ‘Janata Curfew’ and the subsequent harsh lockdowns were catalysts, and millions took to online gaming to find a new world and while away their forced free work-from-home time. But the authorities and establishment, perhaps lacking the real facts and requisite operational industry insights, have been dilly-dallying on the issue of regulatory norms and imperatives, sometimes even putting barriers in place and passing ordinances that threaten to rein in and stunt a surging industry segment.
This is near-hypnotic and it betrays an absolute lack of understanding of the issues at hand. Yes, the Government has taken notice, as the acceleration in the industry has been exponential and revenues to the exchequer (through tax collections) have been welcomed. So much so, that NITI Aayog, which replaced India’s Planning Commission, has had to take note of the surge in online gaming and suggested the setting up of a single self-regulatory organization for the sector, to be governed by an independent oversight board. Yes, it has put in disclaimers, suggesting an age cap on Fantasy Games to users above 18 years of age. Further, NITI Aayog is drafting ‘uniform operating rules’ for India’s online gaming companies.
Despite NITI Aayog’s intervention, many Indian states, given our archaic laws and an antiquated, English-dictated judicial system, continue to rule large and strong over the online gaming system, chanting laws that date back over a century, even before the humble telephone was invented by Alexander Graham Bell. Things are draconian to an extent that they sometimes even threaten the very existence of this fast-emerging industry, which employs thousands. Except for the few states that have recognized online gaming for what it is, many seem to be resorting to a wait-and-watch approach to decide what should be done next. Some others are vacillating. Others still, are sitting on the fence.
It is an irony, a mystery even, and that’s because the online gaming industry is not just creating jobs and revenues for the government, it is also providing new-found succor to India’s telecom industry, a desperately-needed shot in the arm for telcos who have been hunting for new revenue streams ever since voice call revenues first flattened and then dipped alarmingly. Data revenues have picked up significantly, thanks to nearly 500 million gamers repeatedly using their mobile phones—so much so that around 90 per cent of online gamers in India prefer to use their mobile phones as their primary gaming device. Spokespersons for the top two telecom operators in the country affirm this trend. “We have seen data revenues increase by between 15-20 per cent on the back of the surge in online gaming over the last few years, especially through the Coronavirus pandemic. Going forward, we see what happened in South Korea, Japan and much of Europe being replicated in India, especially as work-from-home is now here to stay and people increasingly take short but frequent (gaming) breaks from work,” a telco executive said.
And let’s not forget the boom in smartphone sales. The proliferation of low-cost mobile phones and inexpensive data packages from India’s telcos have not only seen online gaming boom, but gaming data consumption is hitting new highs, creating a perfect playground for the thriving mobile E-sports ecosystem. And finally, improved mobile graphics and sticky game content, increasingly in local languages, are also ensuring that local game and app developers now have access to new sources of employment and incomes.
To pick up the previous thought, will fence-sitting thus work for the Government? Maybe, but as we are witnessing in the case of the farmers on Delhi’s borders, it doesn’t last. And really unfortunately, in this case, it will not last at all. For it is risky, even suicidal, for the authorities to characterize the gaming industry as a single, homogenous block, leaving behind an urgent need for clear and pure legislation to ensure that skill-gaming platforms remain ethical and true. This is a simple business and we need prudent, targeted and bold law-making for the Real-Money Gaming (RMG) sector.
Even the Supreme Court has agreed with this summation, on four different occasions over the years. The apex court opined that games of skill and games of chance are totally different—that the simple logic is that when playing a game of chance, you simply wager on blind luck; while in games of skill, you rely on “skill.” While the online gaming space is scaling revenues of Rs 8,000 crore, set to expand to Rs 40,000 crore by 2024-25, the overall size of the real-money gaming (RMG) and skilled gaming sectors is already in the region of Rs 20,000 annually.
So why are we facing this dilemma today? Perhaps because just as it happened with IT and telecom in India three decades back, online gaming is today an industry that is misunderstood, hence misappropriated. Former Union IT and Telecom Minister Pramod Mahajan in Parliament House in 1998, when asked about the Indian Information Technology industry said that we haven’t interfered, and before we knew it, both sectors (IT and telecom) have grown and are now giving us huge revenues through taxes.
