India’s online gambling industry needs effective regulation
India’s online gaming industry is one of the fastest growing industries with plenty of investment, huge jobs and revenue dwarfing many other forms of media like movies, TV, music and print. written. According to a report by KPMG, this industry is expected to generate revenues of over Rs 29,000 crore in 2025 with over 65 crore users, employ over 70,000 highly skilled technologists and many others indirectly dependent on the industry.
Despite regulatory uncertainty and people returning to work as the pandemic subsided, the online gaming segment grew by 28% in 2021 to reach Rs 10,100 crore. It is the enabling ecosystem in India that has ensured this massive growth, coupled with the culture, creativity and relentless commitment of young game developers.
As the industry draws attention to itself due to its massive growth, successive court judgments have upheld online gambling as a legitimate activity. Recently, in India’s capital of Karnataka, the High Court delivered its verdict lifting the blanket ban on online gambling, reaffirming the gambling industry’s faith in India’s legal system. In October last year, the law prohibiting betting and betting in online games was notified by the government of Karnataka. This came after the high courts of Kerala and Madras had previously overturned similar bans by their respective state governments.
Prior to the Karnataka verdict, the High Courts of Punjab and Haryana, Rajasthan and Mumbai recognized fantasy sports as games of skill and a legitimate commercial activity protected by Section 19(1)(g) of the Indian Constitution. These judgments have clearly shown that blanket bans are ineffective means of dealing with perceived problems.
Although we have made progress in this direction, there is still a long way to go. Although these positive judgments were celebrated by the industry and millions of gamers, the reasons leading to blanket bans remain unresolved. However, this thriving online gaming industry suffers from a lack of regulatory oversight. The ambiguity of the legal regime poses a challenge for investors and a significant compliance burden for gaming operators.
Overall, online gambling is a fairly well-regulated space. Many countries, including the UK, US and EU, have regulations in place to ensure that users can enjoy this form of entertainment responsibly. Similarly, in India too, there is a need for constant collaboration and creative problem solving from all stakeholders.
Given the complexity of this industry, I believe there is an urgent need to tackle the perception and uncertainty surrounding it to avoid extreme reactions. A well-regulated online gambling industry will also present compelling benefits and economic benefits. The regulations would allow government-mandated operations to keep players safe while increasing industry revenue and employment, resulting in healthy ecosystem growth.
India’s online gaming industry needs strong policy frameworks and digital infrastructure to realize its potential, maximize revenue and become a global leader. A government agency that oversees operations, develops progressive policies that prevent societal problems, appropriately classifies games of skill or chance, provides consumer protection, and combats illegality and crime is needed. Gaming companies should also continue to work with the government to promote responsible gaming by educating players and establishing best practices like performing KYC checks, user authentication, etc. to prevent illegal activities and financial transactions on their platforms.
At the end of the line
For the foreseeable future, the sector’s rapid growth is expected to boost the entire media and entertainment industry by 4-5%. To make this, and many other future growth projections, a reality, the online gambling industry needs the right political structure, legal framework and data privacy procedures. Not limited to economic benefits alone, the online gaming industry holds the power to support government initiatives under the Digital India and Make in India campaigns, and propel India towards its dream of being digitally independent. .
(The author is the Managing Director of the All India Gaming Federation)