Does India Require a Regulatory Body for the Mobile & Online Games?

By Ankush Gera, CEO, Junglee Games

Ankush Gera, CEO, Junglee Games

Headquartered in San Francisco, Junglee Games is a leading game development company that creates cutting-edge gaming technology and provides value-added gaming solutions. Founded in 2012 by Ankush Gera, Junglee Games is the fastest growing skill based real money gaming company for India.

Online and mobile gaming in India is a very lucrative industry and it is booming at a rapid pace owing to an endless list of gaming apps launching every day. Even the recent KPMG-FICCI study suggested that, the Indian gaming market will reach $700 million by 2017. On the social gaming side, gamers are ready to spend real money to purchase virtual currency to unlock higher levels and make premium purchases.  Moreover, on the skill gaming side, gamers spend and play with real money, but they are limited to games of skill like Rummy.  Online games in India have turned into a full-fledged economy with a well-developed demand and specific customer base. This form of gaming in India doesn’t really need of a regulatory body as the central government and the Supreme Court have already clarified their legal positioning on it.

It is unauthorized activities like gambling and betting that are traditionally associated with money laundering, tax evasion and use of illicit funds. Regulators of all jurisdictions where gambling is legal have shown concerns of black money being used in casinos. In India, the Goa government amended the casino license conditions and issued guidelines to casinos, which included a collection of Know Your Customer (KYC) documents, reporting of transactions above Rs. 10 lakhs to the Financial Intelligence Unit (FIU) and maintaining special checks on Politically Exposed Persons (PEPs). While ‘Games of skill' are governed by the IT act, it is the ‘Games of Chance' that needs to be regulated. 

The ‘Games of Chance' have always held a certain charm for the Indian psyche from the days of the Mahabharata when the Pandavas lost their kingdom in a game of dice. In the present day, despite several attempts to ban it, betting continues, albeit in an underground way and substantial resources have been invested into enforcing such a ban. India has a hypocritical view of the fact that Rs.300,000 crore is what is illegally wagered on sports betting, leaving the bookies, mafia and perhaps even politicians to reap benefits from this unregulated industry. For games of chance and sports betting, the only way out is that the Government should think of legalizing and regulating betting in a way that it reduces the practice of match fixing in its bid to control the spread of existing illegal activities. It will also be able to generate a huge amount of revenue in the form of taxes as well as the investments made in curbing it.

The greatest advantage of regulating sports betting is that there will be accountability for the large amounts of money transferred through illegal channels leading to a reduction in cases of match fixing, money laundering and crimes. Now, the question is how to tax the money involved in gambling and devise a system which encourages betting operators to function openly. The state of Sikkim has already started issuing licenses which is a great first step.  Hopefully 3-4 major states follow and we can take pride in regulating gaming as a country as opposed to morally opposing it as a social evil, whilst fully being aware and turning a blind eye to the insane amount of illegal betting.  A lot of the downsides of real money gaming on games of chance or sports betting will go away when it is regulated.  This is why the U.K. and the U.S. and most countries in EU have regulated gaming. Australia was a late addition and now they’ve done the same.

Everyone benefits from transparency and disclosure of information. By legalizing gambling and subjecting it to regulation, we may possibly never get transparency, but we will get translucency, compared to opaqueness. Developed countries have done this.  Even gambling is a socially acceptable practice, but not legally. Despite the ban on it, the gambling market in India is estimated to be worth $60 billion per year. There is a misconception that legalizing sports betting would result in a free-for-all market. The fact is that, proper legislation would circumscribe criminalization of Indian sports, illegal rackets and money laundering. So, morally even if we don't want gambling to be legalized, it needs to be regulated in India because it is one of the biggest under-regulated betting markets.

We must not deny the fact that whether it is by chance or by skill, betting games are here to stay. Generations after generations, they have become a major source of entertainment, developed new industries and sources of revenue, and introduced new uses of the human imagination to millions of people.

Games are a form of entertainment. Social games and Games of Skill, are exempt from gambling laws and are pretty well covered by existing laws and the IT act and don’t really need a regulatory body, while one certainly can’t hurt.  However, for games of chance, when played with real money, it is important to have a watchdog in the form of a dedicated regulatory body against the risks associated with it to keep it safe, transparent and enjoyable for all.

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