An inter-ministerial committee in India is being set up to limit the amount of money an individual player can spend on online gaming in an approach causing some consternation among proponents of safer gaming practices.
The move is to ensure consumer and gamer protection, according to the Ministry of Electronics and Information Technology (Meity), the organization tasked with setting up the body. However, there are concerns from industry observers that it will push players into the offline and unregulated sphere as a means of getting around any overarching limits imposed.
The first draft of the regulations will be released for public consultation in September. Earlier in August, the Economic Times reported that the officials from the group suggested an amendment to the Information Technology Act of 2000 to integrate rules for the gaming sector.
A crackdown on players’ spending limits follows earlier proposals from a meeting between senior IT ministry officials and gaming companies’ representatives, which asked for a clear differentiation between games of skill and chance.
This report quoted an official as saying: “Gambling is a serious offense. But there is a very thin line between skill and chance, and there are multiple arguments on both sides. The SRO should have powers to decide that if a game is trespassing into the game of chance and therefore gambling, there must be statutory powers to take them down.”
Why is there a concern from the gambling industry surrounding the new ministerial group? Is it the safest practice to restrict spending for players? What are the alternatives?
Online Gaming Platforms Voice Concern Over New Regulations
The committee’s immediate goal is to restrict spending for online gamers, but the anticipation is this approach will spill over into online gambling too.
The news comes fresh off a wave of regulations from several state governments throughout India, including Tamil Nadu and Karnataka.
In a meeting with Meity last month, a number of the biggest gaming platforms, including Nazara Technologies and Sporta Technologies, were advocating for implementing a central regulatory framework. This approach, they argue, is more sustainable than a standalone regional mandate for local politicians that often err to more naturally conservative tendencies.
Industry analysts ENV Media agree, citing several reasons in their article International Gambling Licenses Current Scope and Future Outlook. They write:
“India is a particularly emblematic case of similarly impending regulatory needs. The prohibition of betting is widely seen to have been ineffective. In such contexts, certain authority recommendations cannot be overlooked. The Committee on Reforms in Cricket (in 2015), the Law Commission of India (in 2018), and recent court judgments (including by the Supreme Court) have suggested that betting should be regulated and taxed. In a nation with widespread illegal betting and gambling (reportedly worth well over $100bn annually), criminal activity has had the chance to flourish and continues to engage public resources and law-enforcement efforts. Emerging markets (India in particular but not only) will benefit from creating their own Central regulatory framework, a Gambling oversight body, and a Consumer Data protection regulation.”
What Will New Rules Mean for Online Gambling Safety
There is a concern that limiting online gamers’ and gamblers’ spending will force them to spend elsewhere – a move that will drive them into the arms of the black market.
In this space, there are no safety guidelines, responsible gambling tools, or even a guarantee of financial protection. Whether the player is a sports fan in love with cricket chasing the best live cricket satta rates, an online gaming fanatic, or a player of blackjack online – their fortunes are at the behest of criminals. The government risks driving online gamers and gamblers into unregulated spaces by limiting spending.
As ENV Media references above, India’s illegal online betting industry is worth billions of dollars, which is money funneled to criminals rather than any taxable income for the government.
Industry analysts observe that central regulation is the only genuine answer. They argue the increase in revenue will help create jobs, support national grassroots campaigns to educate players on safe and responsible online gaming and gambling practices, and hand back control of a sunrise industry to the country’s best innovators.