The apex court in Bengaluru lifted the blanket ban on online games for money. The decision was a big relief for fantasy, casual and skill games, a growing yet largely unregulated sector. Experts insist there is still work to be done by policymakers but the latest developments are a cause for optimism.
Blanket Ban on Real-Money Games Struck Down
In a much anticipated decision, the Karnataka High Court declared illegal the State government’s move to ban online gaming for money. Last year, authorities in Bengaluru passed an Amendment to existing gaming acts outlawing all online games involving betting, wagering or prize pools of any kind.
This came as a shock to many tech startups based in the State and around the country, including desi gaming giants Dream11 and Mobile Premier League (MPL). The latter were the two most prominent gaming companies that had to suspend operations in Karnataka, although the rule immediately affected hundreds of smaller tech businesses and millions of players.
Yet another angle to the controversy was seen in the fact that the lottery was not included in the ban even though it is still the biggest legal form of gambling in India. Other state governments had previously attempted similar bans on online games – such as Tamil Nadu, Andhra Pradesh, Kerala, Assam and Odisha. Some stood or are still discussed; most were struck down by regional High Courts.
The fact that a Tamil Nadu lottery ticket online booking could be legal while favorite desi skill games like rummy, poker or even fantasy cricket could be blocked has always seemed harsh by digital entrepreneurs in the Union. Wagering and money prizes are simply one of the forms of monetization in the business. While many of the bans were canceled by court rulings (citing constitutional rights), gaming operators and supporting digital firms have a hard time competing with global and offshore providers.
The lack of consistent legislation has been an industry stigma for decades. Proper regulation is needed to distinguish games of skill from those of chance, introduce limits and responsible gaming standards. More importantly, it is fundamental in helping the Indian gaming sector plan for a long-term strategy.
Regulation Remains Key for Companies and Players
Numerous other market studies confirm the fact that regulation remains the best way to mitigate social costs while reaping economic benefits. Most mature gambling jurisdictions manage to protect players by maintaining only quality operators on the real-money gaming market.
European, American and Australian authorities tend to issue gambling licenses which evaluate the stability and efficiency of the company. Crucially, this is the easiest and most transparent way to introduce responsible gaming limits, check financial procedures, game mechanics and impose taxation on both company and player earnings.
National gambling and skill gaming licenses can not only raise the level of domestic market competition, it will also bring desi tech businesses into a more favorable position against offshore competition. Virtual sports, online casinos, betting exchanges and lotteries would all welcome strict requirements as a means to prove their worth and install a protection net against black markets draining the national market.
