Nuanced regulation is preferable to banning online gaming

| Updated on September 08, 2020

Legalised online gambling will open up a revenue channel for governments, considering the exponential growth in the number of online gamers

At the outset, it would appear that the move by the Andhra Pradesh government to ban online gambling by amending the AP Gaming Act 1974 is unexceptionable — given the growing and, for some, disconcerting popularity of pay-to-play gambling websites and software applications in India, especially among tech-savvy youngsters. In a related development, the Centre has banned 118 games and apps, including the popular PUBG. There are three strands to these developments: The legal, the strategic and the sociological. Concerns over the impact of online entertainment apps on teenagers have found political expression from time to time, while gambling has traditionally been frowned upon. Recent apprehensions over the inroads of Chinese products, physical and digital, have fuelled these sentiments. Now, as a result of Andhra Pradesh’s ban on online gambling, organisers of online gaming events may now invite a two year jail term. That said, the move, lauded and endorsed by several other States which reportedly are contemplating introducing similar clampdowns on online games such as Poker and Rummy, seems a tad myopic.

Globally, online gaming is a more than $200-billion market. In comparison, India’s online gaming industry is a minuscule $1 billion, according to estimates from various agencies including the consultancy KPMG which, along with the Federation of Indian Fantasy Sports, recently brought out a report on the potential of online gaming. Thanks to the smartphone explosion and the way powerful chips are made available at affordable rates, mobile computing is leapfrogging in India, triggering an influx of entrepreneurs in sectors such as e-sports, utility apps, edutainment, and more. Globally, gaming and simulations are now used to impart complex lessons in the education sector and there exists a thin and blurred line between online gambling or betting that fall under the malicious category and programmes and portals that run legitimate games. A recent analysis shows that over 400 start-ups are active in the e-gaming space in India. Together, they have drawn nearly $450 million in investments (2014-2020), and the kitty is growing faster.

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A blanket ban on online gambling and gaming hence is not advisable. Instead, governments can adopt a pragmatic approach. They can set up a body to classify, legalise and regulate online gaming; introduce a proactive and transparent licensing regime to make sure online activities are monitored; and reform the archaic Public Gambling Act, 1867, to sync it with the digital context. Notable here are the Supreme Court observations (1996) on horse-racing bets, which it has held as a game of skill (State of Andhra Pradesh v. K. Satyanarayana and ors and KR Lakshmanan vs State Of Tamil Nadu And Anr). Legalised online gambling will also open up a revenue channel for governments, considering the exponential growth in the number of online gamers; like legalised liquor, it can be a sustainable source of revenue. Finally, online gaming calls for regulation with just the right sense of balance.

Published on September 07, 2020

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