resr 5paisa Research Team 9th December 2022

Centre plans to regulate real-money online games. All you want to know

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All online games that involve real money could soon come under the oversight of the central government, according to a Reuters report. 

India's planned regulation of online gaming will apply to all real-money games after the Prime Minister's Office overruled a proposal to only regulate games of skill and leave out games of chance, the report said. 

Why are these new rules important?

The much-awaited regulations are seen shaping the future of India's gaming sector that research firm Redseeer estimates will be worth $7 billion by 2026, dominated by real-money games. 

Renowned venture capital investors such as Tiger Global and Sequoia Capital have in recent years backed Indian startups Dream11 and Mobile Premier League, popular for fantasy cricket.

What has been done in this direction so far?

An Indian panel tasked with drafting the regulation in August proposed a new body to decide whether a game involves skill or chance, and then let skill games be governed by planned federal rules that call for registration requirements, know-your-customer norms and a grievance redress mechanism.

Chance games - considered akin to gambling, which is mostly banned across India - were set to stay under the purview of individual state governments which would be free to regulate them, Reuters has previously reported.

But in an Oct. 26 government meeting, an official from Prime Minister Narendra Modi's office objected to such a differentiation, calling for expanded oversight on all types of games, according to the confidential minutes of the gathering reviewed by Reuters.

Defining games has been contentious in India. India's Supreme Court says the card game rummy and certain fantasy games are skill-based and legal, for example, while different state courts have held different views about games such as poker.

What are the key concerns that the government is trying to address?

The drafting of the new regulations comes amid growing concerns that the proliferation of such games, particularly among young people, had led to addiction and financial losses, with some reported cases of suicide.
 

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