State Legislation on Online Gaming Expected

10Cric Cricket
10Cric Cricket

India’s online gaming industry is enjoying its sunrise stage in a rather unclear legal environment. The industry hopes legislation will strengthen the sector and produce positive results for the people and the government as well.

Regulation Would Bring Benefits Throughout

Rajasthan, among other states, is believed to be considering the implementation of a contemporary legislative framework on the online gaming sector. Industry representatives have expressed hopes that the state government under Chief Minister Ashok Gehlot would be able to adopt a progressive regulatory mechanism differentiating between games of skill and games of chance that will prove to be a proper guiding light for the other states.

“Regulation and not prohibition leads to better outcomes,” according to Bhavin Pandya, co-founder and CEO of multi-game platform Games24x7. He adds that a progressive online skill gaming policy will generate favorable results for the industry, the government and the people together.

Online Gaming Boosts with Sunrise Stage Industry Status

‘Sunrise industry’ is an informal term used to describe a booming business segment, often a novel one, that typically features high growth rates, a great number of start-ups, and prolific venture capital funding.

India’s online gaming sector is a perfect example of such a sunrise industry. Fueled by a comprehensive combination of various factors like young demographics and rising disposable incomes, substantial smartphone penetration and affordable data plans spread, and a rapidly growing digital payment infrastructure, the sector was able to close the circle and produce an expanding ecosystem of game developers.

Reportedly, by 2020, more than 400 gaming companies already dotted the map of India. A great number of them are veterans experienced in providing support to foreign enterprises, but a substantial part are totally fresh players on the market. Both groups are now busy creating localized content featuring genuine desi genres, themes and graphics, and offering local language support. This, naturally, adds even more fuel to the rapid expansion of this sunrise industry.

Fast Growth of Industry is Observed by Many Analysts

A newly published primary report by KPMG on online casual gaming in Bharat estimates the Indian gaming market’s total revenue at ₹ 13,600 crore for the financial year of 2021, to be generated by a user base of 433 million people. By FY25, the market is expected to grow more than two-fold to a total worth of ₹ 29,000 crore and a base of 657 million users.

Similarly, Deloitte expects the Indian online gaming market to reach ₹ 20,500 crore (approximately $ 2.8 billion) as early as in 2022, growing at a CAGR (Compound Annual Growth Rate) of 40 per cent.

A recent InMobi report links Covid-19 lockdowns to massive increases in online searches on various topics between April 2020 and June 2021. Notably, searches related to online games have increased by 52 per cent, and queries with keyword string ‘cricket live score’ have risen 381 times, cricket websites like 10Cric has seen a rise in visitors as a result of this.

The KPMG report evaluates Real Money Gaming (RMG) at ₹ 4,980 crore and online fantasy sports at ₹ 2,430 crore for FY21, and projects the revenue of both segments to reach ₹ 6,130 crore and ₹ 5,430 crore respectively by FY25.

Currently, these sectors exist in a gray area of undefined legislation exceptions, mostly based on the fact that the Internet did not exist when most national and state laws were adopted.

Current Rajasthan Legal Situation

Gambling in the state of Rajasthan is still governed by the archaic colonial-era Public Gaming Act of 1867 and the Rajasthan Public Gaming Ordinance of 1949 which mainly serves to analyze and decipher some rather ambiguous sections of the outdated national law.

Main differences to the majority of other states’ legislation is that the police need a lawful warrant to enter and search a gaming house and that a person found in such a house cannot be presumed to be gambling if no gambling instruments are established on him or her. The other major difference is that lotteries are forbidden and the familiar raffle kiosks or parlors cannot be found as only online lottery sites are available in the state.

Rajasthan Compared to Other States

Despite boosting the largest territory of all Bharat states, Rajasthan shows as an average performer in ENV Media’s research analysis on India’s Richest Cities and Its Large Online Gambling Communities. The “Land of Kings” ranks tenth with 4.4 per cent of the total user flow from April 1st to September 15th 2020 compared to Maharashtra’s 17.4 per cent, with Telangana, West Bengal and Karnataka’s performance being just below the 10 per cent mark.

According to the analysis, Rajasthan’s relatively small population for its size of just 81 million (2019 estimates) does not fully account for its rather low user flow performance. More important are the socio-economic factors, where the state consistently keeps an average stance with a Poverty Index of 14.71 per cent and GDP per Capita of $ 6,044.

Notable is Rajasthan’s HDI (Human Development Index) performance of 0.629, again just below India’s average of 0.647 (2018 data). HDI is a “statistical composite” index that takes into account various factors like life expectancy, education related data like literacy rates, school enrollment and attendance ratios, and income per capita.