The Big Story: A regulatory overhaul will take India’s online gaming industry to the next level

(By Elizabeth Beattie) It’s no secret the online gaming industry is flourishing in India, with Deloitte forecasting it will be worth $2.8 billion by 2022, up from $1.1 billion in 2019. Encouraged by smartphones and affordable data, market conditions are promising for businesses, save for a niggling regulatory concern.

India does not currently have a unified law that deals with gaming, and until it does, the industry is vulnerable to a patchwork of regulations, which may differ drastically from state to state. Ranjana Adhikari, co-head of the Media, Entertainment & Gaming practice at Nishith Desai Associates, says the key challenge the absence of a central law poses “is the instability it causes to the business for online operators owing to different policies and approaches taken by each state.” While for some states, skills-based gaming businesses are protected under the constitution of India as “legitimate businesses,” others have included skill and other kinds of gaming under the prohibitions, she explains.

It’s this mismatched approach that makes it hard for businesses. “For online gaming business to thrive, having a consistent approach and thereby a central law is the need of the hour,” Adhikari notes.

The players feel they should be regulating themselves. Sunil Krishnamurthy, general secretary of the All India Gaming Federation Advisory Board, has argued that self-regulation is key for the gaming industry to move forward. This view has found favour with NITI Aayog, a policy think tank of the Indian government, which recently advocated for a “a light-touch self-regulatory approach for a sub-sector of gaming, i.e. fantasy sports,” notes Dibyojyoti Mainak, vice-president for policy and legal at the fast-growing e-sports company Mobile Premier League.

“As of today, multiple bodies including All India Gaming Federation, Federation of Indian Fantasy Sports, The Online Rummy Federation, etc. are administering their self-regulatory charters,” Mainak adds. “The advocacy for a light-touch approach to regulation is a welcome one, as, in a sunrise sector such as gaming, which is extremely nascent, we must balance compliance with innovation and competition, and ensure low entry barriers for newer players to enter the space.” 

Adhikari feels that while self-regulation is “a good place to start,” the ideal situation would be “a combination of a central law with a light-touch approach to regulation.”

“This can be combined with self-regulatory bodies taking the onus of compliance with certain parts of the law,” she argues. “A combination of both gives teeth to the self-regulation efforts under law, overcomes the issues of over-regulation and lets the regulator focus on macro issues like policy changes rather than the micro ones on compliance.”

But what all parties want is clarity when it comes to regulations. “Clear regulations in a sunrise sector like gaming, which clearly delineates it from gambling or other social evils would bring stability to this sector,” notes Mainak of MPL. “This, in turn, is likely to encourage further investments and growth in the sector. India has a unique opportunity to become a global leader for gaming and e-sports given the rapid proliferation of the Internet and smartphones across the country.”