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I-Gaming Industry Eager to Embrace Any Regulation Effort

The I-Gaming industry has grown substantially during the pandemic as most of the Casinos have been closed down following the Covid norms.
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Rapidly growing sectors of the economy are typically dubbed ‘sunrise industries’. Immense growth rates and a huge number of participants often mean regulatory attention is needed.

Rajasthan Considering New Legislation on Gaming

According to recent reports, Rajasthan, moving in parallel with some other states like Uttar Pradesh and Karnataka, is contemplating joining the group of Sikkim and Meghalaya which have implemented modern gaming policies. Industry members hope that veteran CM Ashok Gehlot’s government will succeed in producing a contemporary regulatory mechanism on the basis of differentiation between games of skill, and games of chance that will adequately serve as a leading example for other states.

“Regulation and not prohibition leads to better outcomes,” says Bhavin Pandya, co-founder, and CEO of Games24x7, an online skill gaming company that owns popular platforms RummyCircle, My11Circle, Carrom, and Ultimate Games. According to Pandya, a progressive online skill gaming policy will be to the benefit of all – the people, the government, and the industry.

Rajasthan Public Gaming Ordinance Has Been Maturing for Over Seven Decades

Unlike wine, the legislation does not necessarily enhance its quality automatically overage. In the current informational era, regulators are often outpaced by technological developments. The national-level Public Gaming Act of 1867 and the state-level Rajasthan Public Gaming Ordinance of 1949 focus on banning physical, or what we now call ‘offline’, gaming houses and lotteries. This leaves online wagering in the gray zone of undefined regulation exceptions and Rajasthan residents are free to place bets on online lottery sites.

The Land of Kings within the Bigger Picture

A recently published research paper by ENV Media juxtaposes propriety data from the company’s own web assets to publicly available metrics and analyses findings. ENV’s researchers reach the conclusion that socio-economic factors such as GDP per Capita and Poverty Index matter much more than sheer population size when it comes to user base generation.

Rajasthan has twice the population of Telangana (81.03 million vs. 39.3 million, according to 2019 data), but half of its GDP per Capita ($ 6,044 against $ 11,174). Consequently, Rajasthan generates less than half of Telangana’s user flow (4.4 vs 9.9 percent).

This trend is backed up by Telangana’s better performance in terms of the Human Development Index (0.669 compared to Rajasthan’s 0.629) and a lesser percentage of the population living under the poverty line (11.29 compared to 14.71 percent).

National Level Legislation Also in the Making

In December 2020, Centre’s think tank NITI Aayog published a draft guideline proposal concerning online fantasy gaming with the aim to establish uniform national rules for the sector. The paper also envisioned the creation of an independent oversight body to control the industry. Implementation of the regulation would enhance consumer protection and smoothen grievance redressal mechanisms. It would also enable the industry to focus on pursuing innovations and bringing progress to the sector.

The online gaming industry answered with a collective plead for NITI Aayog to recommend a framework for all games of skill. “… it is paramount to understand that fantasy games are only a part of the entire skill gaming industry. There is an equal, if not a larger need, to regulate the broader skill gaming industry,” said Sameer Barde, CEO of the Online Rummy Federation.

Online Gaming Industry is in its Sunrise Stage

KPMG’s June 2021 Primary Report on Online Casual Gaming in India “Beyond the Tipping Point” estimates the nation’s online gaming market in FY21 at ₹ 13,600 crores in terms of total revenue. A 433 million-strong user base is expected to spend ₹ 6,020 crores on casual games, ₹ 4,980 crores on Real Money Games (RMG), ₹ 2,430 crores on online fantasy sports, and ₹ 0.170 crores on Esports by the end of the current financial year.

The financial analysts’ report foresees the market’s user base to grow with 51.7 percent to 657 million by FY25, and its total revenue to increase by 113 percent to ₹ 29,000 crores. Broken down by sectors, the most substantial growth rate of 235 percent is predicted for Esports which is expected to reach a revenue of ₹ 0.570 crores.

The 180 percent growth of casual games will see this market segment attract ₹ 16,900 crores of income. Real Money Games and Online Fantasy Sports are expected to grow by 23 and 123 percent to ₹ 6,130 crores and ₹ 5,430 crores respectively.

Deloitte India makes similar predictions in their recent Technology, Media, and Telecommunications report. They say the Subcontinent’s online gaming industry has been growing at a compound annual growth rate (CAGR) of 40 percent and will reach a total worth of $ 2.8 billion (roughly ₹ 20,500 crores) in 2022.

The Covid-19 Pandemic Further Fuels Industry Growth

The same KPMG report observes that after Covid-19, Indians spend more time on their smartphones (25.8 hours per week for the week of June 27, 2020, compared to 22.7 hours per week before the pandemic), and that a bigger portion of this time – 12 percent or 3.1 hours ‘after’ against 11 percent or 2.5 hours ‘before’ – is dedicated to mobile games.

The Search in India – 2021 Trends Report by InMobi analyses changes in online behavior and search preferences for the period between April 2020 and June 2021. “In the last few years, digital content consumption has increased manifold. The pandemic has further accelerated digital adoption with people spending significant time on their PC, phones, and tablet screens,” says Rohit Dosi, Director of Microsoft Advertising at InMobi. Specifically, online games-related searches have increased by 52 percent for the period.

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