Skill over chance: Indian gambling industry on the cusp of transformation

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~ By 2024, the online skill gaming industry is expected to have around 2 lakh employees ~

~ The move by the Karnataka government is a setback to the state’s reputation as a technology center and start-up capital ~

Background: The Karnataka Assembly passed an amendment to the Karnataka Police Act of 1963 aimed at banning online gambling and restricting online gambling. Chief Minister Basavaraj Bommai said the proposal was not valid for online games that strictly conform to the “Game of Skills”.

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23approx September 2021: India’s online gaming industry is on the cusp of transformation and, according to KPMG, is looking to grow over $ 3.9 billion in 2025. During the unprecedented period of the pandemic, the online gaming sector was one of the fastest growing industries as the sector attracted significant investments of around $ 500 million.

Online gaming has become an important path today due to a variety of favorable factors such as a young and tech savvy population, affordable availability of feature-rich smartphones, better internet connectivity, increased awareness and development. Hence, the domestic industry has the potential to scale quickly and make a significant contribution.

In light of recent events, the gaming industry is at a crossroads with the passing of the Karnataka Police Force Bill (Amendment) in 2021. On the one hand, the progressive path promotes innovation, scientific temperament and change in a slightly regulated political ecosystem, the other end of the regressive path avoids progress and change. This avenue advocates that these bans are easier to implement than come up with solutions that can give India the chance to lead the gaming space globally. However, industry players are optimistic that proper regulation will lead to better results for the industry. Most of the Indian unicorns are based in Bengaluru, which is due to an advanced policy for startups, regulatory safety and young and skilled workers. Hence, the government of Karnataka could damage this image of Bangalore, and likely the country’s entire gambling ecosystem, by introducing a law that does not prohibit online gambling for real money in its state.

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Mr. Roland Landers, CEO, States of the All India Gaming Federation, “India is the fifth largest online gaming market in the world and skill-based gaming, an emerging sector, is spawning a growing number of unicorns in the country, particularly in Karnataka. The sector has made a strong financial contribution to the Indian economy even during an unprecedented slowdown and is expected to generate more than $ 3.9 billion in revenue by 2025. The expansive growth also means the creation of job opportunities. The industry currently employs 40,000 people in direct jobs, 5,000 of them in Bengaluru alone. The online skill gaming industry is expected to employ around 2 lakh people by 2024. In a post-Covid world where global economies are clinging to straws, it is inadvisable to be against an emerging sector. The move by the government of Karnataka is a setback for the state’s reputation as a technology center and start-up capital. “

“The Karnataka ban is worrying for this emerging sector in India, especially at a time when the higher judiciary has reiterated the difference between games of skill and games of chance. That Karnataka, a technology and start-up capital of India, should take such a step is all the more worrying as many other states are realizing the potential of gambling and are working on strategies to attract investment from gambling companies – given the immense importance of the sector Multiplier advantages “, S.ays, Dinker Vashisht, Vice President, Corporate Affairs, Games24x7

Skill-based gaming cannot be compared to gambling, and a ban is not a solution. In drafting this additional judge Vikramajit Sen, a former Supreme Court Justice and former Chief Justice of the Karnataka Supreme Court, added, “The Indian regulatory framework in India made a clear distinction between games of skill and games of chance. Just because games of skill may have an entrance fee associated with it, it cannot be considered a game of chance. Games of chance are considered games of chance because they require luck rather than skill and are therefore expressly prohibited by law, with skill games being considered legal in most states, including digital and online. The sector needs the support of state governments to promote responsible gaming initiatives and the recognition of the AIGF “Self-Regulatory Framework”. AIGF and its advisory members look forward to the opportunity to involve stakeholders within the state government to form an industry body on this matter. “

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Given the grave concerns raised by the Karnataka Government’s move to ban online gambling, PK Misra, President Players’ Association – AIGF and former senior IAS said, “The move will affect the online skill-based gaming sector and end the right of gamers to make a living. There is no clarity about the scope of this law. About 10-12% of India’s gaming community is based in Karnataka, and many of these players who compete on an international level are not only afraid for a living, but also fear for their ability to achieve their dream of being professional gamers on an international level To become platforms. I hope, of course, that the state government clearly differentiates between games of chance and games of skill. Since 1957, the Supreme Court has affirmed games of skill as a legitimate business that is protected under Article 19 (1) (g) of the Indian Constitution and also supported in several judgments by the Karnataka Supreme Court. “

As an industry, we need to make sure they are promoted while ensuring that players have an enriching and unique experience. Muskan Sethi, Responsible Gaming Ambassador for the All India Gaming Federation, expressed her views: “Every professional player spends his time and effort to improve his skills and his gameplay in order to perform better at national or international gambling tournaments for the players living in this state, instead of banning such games from the market, I would suggest as a player, that the government should seek, in consultation with industry stakeholders, to develop a regulatory framework that encourages professional gameplay and the rise of the gray gambling market. “

According to a FICCI statement, a ban on games of skill will not only be unconstitutional but also lead to massive losses in income and jobs, as well as opportunities for users to develop their skills. The statement further suggests that if the law bans online skill games, the law abiding Indian companies will leave the market and users will turn to harmful offshore and betting apps that are harmful and dangerous. There are other major offshore and Indian gambling players currently offering their services in Karnataka even though they are illegal. Some of them are endorsed by big Indian celebrities, do a lot of advertising, and once the skill gaming platforms get out, even more users will turn to these websites and apps.

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