Report recommends government intervention in online gambling sector
A new report by an inter-ministerial group formed by Prime Minister Narendra Modi’s office recommends central government intervention in India’s online gambling sector that includes extensive regulation and strict classification of games and gambling websites.
The report also suggests the creation of a central regulatory authority to oversee the functioning of the online gambling industry and classify games and game formats according to the distinction between skill and chance. For the time until the new body and regulatory framework are ready, the group is proposing rules under the existing IT law to serve as an “interim measure”.
The recommendations issued by the inter-ministerial group follow a meeting held by Minister of State for Electronics and Information Technology Rajeev Chandrasekhar on June 7 this year.
Meeting attendees included over 25 stakeholders such as founders of online gaming platforms, including some of the biggest companies in the industry like Dream Sports, Mobile Premier League (MPL) and Nazara Technologies, as well as representatives from gaming federations, officials from various ministries and lawyers.
According to the panel’s proposal, the new legislation will not apply to online roulette games in India and other games of chance and gambling, as these will remain a matter of state, but will apply to sports online fantasy games, esports, card games and other casual games and game formats that meet the requirements for classification as games of skill to be defined by the new law.
All Indian gaming companies and all foreign platforms offering real money games to desi players will have to follow the new rules. Offshore operators will be required to register a legal entity under Indian law and the national government will be empowered to block access to gambling sites that have failed to register.
The proposal also includes a “code of ethics” for game publishers to follow, requiring them to strictly adhere to the country’s KYC (Know-Your-Customer) standards and provide a robust grievance mechanism for customers. A three-tier system for settling disputes and an oversight committee under a relevant ministry will also be put in place.
Stable and predictable business climate, but partial player protection
Proposed updates to India’s central online gambling legislation could ensure a stable, predictable and healthy business climate for the booming local industry and any overseas gambling providers who decide to register and join. register, but will be far from solving the player protection problem.
Instead of wide-ranging regulation of all gambling, gambling and betting activities, the interdepartmental panel recommended a framework that only covers games of skill and leaves gambling out of its purview. application in a grey, unexplored and unregulated area.
Blocking unregistered online cricket gambling and betting platforms could reduce competition faced by Indian gambling unicorns and small businesses in the industry, but instead channel gambling and betting activities and money flows away from the black market, the recommended approach is likely to increase the scale of illegal operations by removing online options.
Studies have shown a huge gap between the size of the total gambling and betting market in India estimated at $130 billion (₹9.5 lakh crore) and the online gambling market valued at $2.8 billion ( ₹22,500 crore), a gap mostly filled by the black market.
The panel comprised of some of PM Modi’s most senior officials was formed with the task of studying global best practices in gambling regulation and coming up with a uniform regulatory regime that would ensure ease of doing business and protection of players against harms such as addictions.
As modern gambling regulations around the world focus on player protection, responsible gambling and safety nets, Indian politicians have once again focused their efforts on turning a blind eye to reality and the enormous black market of games and bets existing in the country.
Protecting the local online gambling business from offshore competition and ensuring that it thrives in a stable and predictable business climate, while forcing it to follow strict rules, would be a laudable achievement by the government, but stigmatizing millions of Indian gamblers and bettors and leaving them at the mercy of the illegal market and its dubious methods of debt collection cannot be cheered.