India should create a regulatory body to classify online games as based on skill or chance, a government panel said in a report seen by Reuters. The panel of Prime Minister Narendra Modi’s top officials has for months been drafting regulations for the country’s online gaming sector. It comes amid rising concerns over games causing addiction and ‘inconsistent state laws’ disrupting business.
India needs a new federal online gaming law, which will provide regulatory flexibility, a panel of government officials has said. The panel considered only online skill games, and not gambling, which is handled by states. But many illegal offshore betting and gambling websites in India have become popular among Indian users.
Gambling websites or apps can be banned under the proposed Digital India Act, an IT ministry report has said. A senior government source said that although the federal government could classify chance-based games as harmful, it would let states make the final call on whether to allow gambling. The report noted that state governments already find it ‘difficult to implement and monitor geo-fencing measures’ to ensure that no user in their region is accessing an illegal form of gambling or gaming.
According to research, India’s online gaming sector brought in Rs 65 billion ($817 million) in transaction-based income last year. Top Indian cricketers’ endorsements of real money gambling apps have increased their attractiveness and investor interest. According to PitchBook statistics, Mobile Premier League is valued at $2.5 billion, whereas Dream11 demands an $8 billion valuation. 95 million Indians would be paying gamers by 2021.
An Indian government panel has recommended that online gaming companies should be required to report any suspicious transactions to the government’s Financial Intelligence Unit. Fantasy cricket is one of the most popular online games in India, with a prize pool of $88,000 up for grabs. Users can create their own teams by spending as little as $14 and top-ranking performers can take home $3,462.
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