Many States have taken to banning online games but this is not the solution to prevent the users from getting addicted these games and losing money, said Sameer Barde, CEO, E-Gaming Federation, a nonprofit organisation that works towards self-regulating the sector. Online gaming should be considered as a ‘new form of entertainment,’ he told BusinessLine.

“Online gaming is a State subject. However, there is a lack of ability to enforce state-level regulation in India. A ban on online gaming will hamper the untapped potential of the industry. However, an authority similar to the Food Safety and Standards Authority of India can be created to regulate online gaming,” he said.

Games like Rummy, Fantasy, Poker and Chess are skill-based games and judicially protected under Article 19(1)(g), he said.

‘Gaming, gambling different’

Governments and people are getting confused between gaming with gambling. There are genuine concerns that users can get addicted to gaming and huge money is being spent. However, addiction is not a function of what you do but a personality disorder. This has nothing to do with gaming but only with the person. Also, the money spent on gaming can be controlled using technology, he said.

“Let’s assume that governments have the right intent. However, the question is are you solving the problem? If you ban this, what ability do you have to enforce it? A classic case in point is when it was banned in Telangana in 2017, when the entire industry then was about ₹400 crore. In 2020, a Chinese started 60 gambling apps that are illegal there in a ₹2,000 crore scam. This happened despite the ban in existence for three years. What did the government manage to do?” he questioned.

The legitimate persons in online gaming left the industry in Telngana as they could not legally operate there. The government left it open for illegal operators to make money. The government had zero ability to control them. “How does the government block someone or trace someone?” he said.

If the government’s purpose of banning is to protect the players, this sector should be regulated and legitimate operators allowed to operate and the industry benefits, he said.

Emerging entertainment market

India is emerging as one of the world’s most exciting entertainment markets with the current online market size of $2.2 billion and expected to grow at 30 per cent CAGR to $7 billion by 2026. The revenue is driven by skill-based games like Rummy, Fantasy and Chess. Two years ago, there were nearly 400 million gamers, and this number is likely to reach 700 million in three years. The industry employs nearly 45,000 skilled employees, he said.

There are nearly 400 gaming start-ups, including four Unicorns - Dream11, Game247, MPL and Nazara Technologies. There has been a net investment inflow of $2 billion between 2014 and 2021 with major investors like Tiger Global, Sequoia, Raine, Softban and Chryscapital, he said.

Online gaming has direct benefits for several sectors, including semiconductors, banking, payment gateway, telecom, fintech, sports and entertainment, he said.

Barde suggested formation of a joint committee to explore the possibility of establishing a licensing regime to regulate the gaming sector as a whole and the skill gaming sector in particular.

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