A Game of Skill or Chance?

India is the world’s largest mobile gaming market in terms of App downloads. India's online gaming industry is booming, with a market exceeding $1.6 billion and an estimated 500 million gamers by 2025. India has produced 3 gaming unicorns: Game 24X7, Dream11 and Mobile Premier League. Today, India has around 600,000 e-sports players and 100,000 e-sports teams.

There are more than 400 Mn gamers and 500+ gaming studios in India. The sector is expected to grow by 20% by FY25 to reach INR 231 Bn. However, the legal landscape surrounding online gaming remains complex and uncertain, particularly regarding the distinction between games of skill and games of chance. All it shows navigating the Indian online gaming landscape.

India has the largest fantasy sports market, with a user base of 180 Mn. The categorization of a game as "skill" or "chance" determines its legal status in India. Games of skill are generally considered legal, while games of chance often fall under gambling regulations. The industry is expected to grow at a CAGR of 33% to reach INR 25,300 Cr in FY27.

Current Regulations:

100% FDI through automatic route is allowed under the Electronic System and IT & BPM sectors. Several Indian states have enacted their own laws regulating online gaming, leading to a patchwork of different rules and regulations. The

central government has also introduced guidelines for online gaming intermediaries, but a comprehensive legal framework is yet to be established.

Key Issues:

· Lack of clarity in defining "skill" and "chance": The ambiguous definition of these terms creates confusion and uncertainty for both players and gaming companies.

· State-wise regulations: The patchwork of state laws makes it difficult for gaming companies to operate nationwide and increases compliance costs.

· Potential for addiction and harm: Online gaming, particularly games of chance, can lead to addiction and financial problems.

Recent Government Initiatives

· Indian Government is setting up a National Animation, Visual Effects, Gaming and Comic (AVGC) Centre of Excellence in collaboration with IIT Bombay.

· Karnataka and Telangana have dedicated state-level AVGC policies.

· The government will also set up an AVGC Task force to realize the sector’ potential.

The future of online gaming in India depends on navigating the complex legal landscape while addressing regulatory challenges. A balanced approach that encourages responsible gaming and protects players' interests is vital for the sustainable growth of this burgeoning industry.

S Mohini Ratna, Editor, VARINDIA