Why Online Gaming in India Needs Regulation

Skill-based games are permitted in most parts of the country, whereas games of chance are considered gambling, are considered immoral.

Home » Why Online Gaming in India Needs Regulation

One of the many things that the pandemic has changed in our lives is the way we entertain ourselves. What has gone unnoticed in the midst of the proliferation of OTT channels and the increase in viewing hours is the burgeoning use of online gaming. The average amount of time spent on online gaming has increased by nearly 66% since pre-Covid levels. Over 43 crore people have spent time playing virtual games.

Online gaming is classified into three types. The first of these is e-sports. These are video games that, in the 1990s, were played privately or on consoles in video game stores, but are now played online in a structured manner between professional players, either individually or as teams. The second category is fantasy sports. These are games in which you select a team of real-life sports players from various teams and earn points based on how well the players perform in real life. Finally, there are online casual games that can be skill-based — where the outcome is heavily influenced by mental or physical skill — or chance-based — where the outcome is heavily influenced by some randomised activity, such as rolling a dice. If players wager money or anything of monetary value, a game of chance may be considered gambling.

This thriving industry is hampered by a lack of regulatory oversight. Online gaming exists in a regulatory grey area, with no comprehensive legislation governing its legality or its boundaries with gambling and betting, even though the applicable tax rate is being debated in relevant circles.

From this definitional issue flows the legality of online gaming

Skill-based games are permitted in most parts of the country, whereas games of chance are considered gambling, are considered immoral, and are prohibited in most parts of the country. As betting and gambling is a state subject, different states have their own legislation. Except for Goa, Sikkim, and the Union Territory of Daman, every state in India expressly prohibits any form of gambling, betting, or wagering on games of chance. Assam, Andhra Pradesh, Nagaland, Odisha, Tamil Nadu and Telangana have placed restrictions on games of skill as well. Online games based on the traditional ludo, arguably India’s most popular online game, have sparked debate and allegations of betting and gambling.

Regardless of the legal situation, a large number of people are becoming addicted to online gaming. This addiction is destroying lives and wreaking havoc on families. Compulsive usage of technology was heading towards becoming an issue and the pandemic managed to catalyse the steady journey. It has caused a dramatic increase in our screen time.

Parents across the country are attempting – with limited success – to assist their children in setting limits for technology and gaming. Young boys and girls are becoming enslaved to compulsive gaming, with many spending up to six to eight hours per day playing online games. This is affecting their academic performance as well as their social lives and relationships with family members.

According to psychologists, the opportunity cost of this is enormous, as the impact on health grows with each passing day. Following incidents of violence and suicide, online games such as PUBG and the Blue Whale Challenge were banned. This addiction is also thought to be causing nearsightedness in our children. Inadvertently sharing personal information can also result in cases of cheating, privacy violations, abuse, and bullying.

A need to build checks and balances

There is a need to create checks and balances to keep young people from becoming pathological gamers. Several high courts have urged state governments to regulate the virtual gaming environment. In a recent advisory to states, the Centre outlined helpful dos and don’ts for educating parents and teachers. Even casinos do not allow underage participants, so there is no reason for online gaming companies to be any different. In addition, as is their wont, the Chinese have announced rules limiting online video games for those under the age of 18 to three hours per week. Online gaming has been dubbed the “opium of the mind” by Chinese state media.

A well-regulated online gaming industry provides compelling economic benefits as well. With over 65.7 crore users, this industry is expected to generate revenues in excess of Rs 29,000 crore by 2025. More than 15,000 direct and indirect jobs are expected to be created. The GST council’s Group of Ministers (GoM) has been tasked with determining the rate for online games. The debate over a GST rate of 18% for skill games and 28% for chance games is expected to be resolved soon. The GST and income tax revenue generated by this industry will contribute to the economic multiplier. This industry has the potential to attract significant global investment; current investments in gaming companies such as Dream11 are good indicators.

An urgent need to properly regulate this industry

There is an urgent need to properly regulate this industry. The government should work to strengthen KYC standards. Each game should adhere to a well-established age-rating mechanism, and minors should be permitted to proceed only with their parents’ permission — OTP verification on Aadhaar could potentially resolve this. No in-game purchases should be permitted without parental consent, and the in-game chat option should be disabled whenever possible. Gaming companies should educate users about potential risks and how to spot potential cases of cheating and abuse. They should remove participants’ anonymity and create a robust grievance handling mechanism.

A central government Gaming Authority should be established, and various forms of self-regulation for the industry should be encouraged. This authority could be charged with overseeing the online gaming industry, monitoring its operations, preventing societal issues, classifying games of skill or chance appropriately, ensuring consumer protection, and combating illegality and crime.

Leave a Reply

Your email address will not be published.

New Bookmakers
1xBet Review
1xBet Review

100% First Deposit Bonus Upto INR 8000

Parimatch Review
Parimatch Review

Welcome Offer - Upto INR 8,000 New Customers only

Fun88 Review and Bonus
Fun88 Review and Bonus

First Time Bonus upto INR 30,000
*New customer offer. Get Upto Rs. 30,000 Welcome Offer

Dafabet Review
Dafabet Review

100% First Day Refund
*New customer offer.Get Upto Rs. 1500 refund for Live Casino in case you loose