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BW Businessworld

Regulate Skill-Based Games

This is important to weed out unscrupulous players and ensure a fair, transparent, secure, and responsible environment for players

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With states governing gaming, there is much ambiguity in the interpretation of the law. Many of the skill gaming sites have models derived from countries where online skill gaming is legal. As with all new technology innovations, regulations are not clearly defined, resulting in varying interpretations and enforcement. This ambiguity has resulted in some states banning online skill gaming sites.

Given this situation, The Online Rummy Federation (TORF) was set up by the online rummy game operators to create a level playing field and standardise regulations for the entire online rummy skill gaming sector. 

Regulation would protect players and also generate meaningful revenues for the state. TORF has worked over the last two years to set up a self-regulatory framework in the form of a code of conduct based on similar regulatory frameworks in regulated markets internationally. Operators, who cater to over 80 per cent of all players, currently follow this code of conduct and are audited for it by one of the big four auditing firms.

TORF has recommended the government set up a joint committee to explore the possibility of setting up a licensing regime to regulate the gaming sector as a whole and the Skill gaming Sector in particular. 

In India, the skill gaming industry has huge potential. Nationwide, online skill gaming has an estimated 300 million players of whom 60-80 million play rummy. Largely driven by smartphones and affordable data, the sector’s rapid growth is expected to boost the total media and entertainment industry by 4-5 per cent.

The federation is keen to work with the government to evolve a regulatory mechanism, which will be beneficial to all. Self-regulation is already embedded in the current system to ensure that the player experience is fair and transparent. For example, underage players are not allowed. There is a limit for players and KYC and SSL encryptions are integrated with all accredited sites. 

Niti Aayog has also pitched for setting up a single self-regulatory organisation for the online fantasy sports industry to be governed by the independent oversight board and also had suggested restricting online fantasy games to users of 18 years and above, in a paper it published. The skill gaming industry wants to contribute to the government’s pro-growth vision and to provide a healthy and responsible form of entertainment for the people. A common self-regulatory body will result in the removal of a lot of uncertainty for foreign investors, spur foreign investment to the tune of a few billion dollars, and drive innovation, employment and taxes.

With this clarity in law, there is a chance of significant foreign investment coming into the skill gaming space which is generating over Rs 1,500 crores in GST revenue every year and has the potential to generate over Rs 10,000 crores in GST revenues by 2025. This ambiguity in law sends a mixed signal to potential foreign investors, those who have already invested in the skill gaming space in India, and care deeply about a stable regulatory environment. 

The gaming industry also employs over 70,000 highly qualified technologists, design, and product development resources, and there are many more that are indirectly dependent on the online gaming industry. The findings of the study highlighted that Covid-19 has pushed the growth further as users latched on to online gaming platforms in absence of entertainment options during the lockdown. The time spent on skill gaming apps, increased by 21 per cent during the initial national lockdown, with the total customer base crossing 300 million users

Disclaimer: The views expressed in the article above are those of the authors' and do not necessarily represent or reflect the views of this publishing house. Unless otherwise noted, the author is writing in his/her personal capacity. They are not intended and should not be thought to represent official ideas, attitudes, or policies of any agency or institution.

Sameer Barde

CEO of The Online Rummy Federation (TORF)

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