New Delhi (NVI): The online skill gaming industry has recommended the government think tank, Niti Aayog, to set up a single self-regulatory body to standardize regulations governing the entire skill gaming industry and not just fantasy games.
Just like fantasy sports, India’s skill gaming industry also suffers from the same set of complicated state-by-state laws and regulations. There is an equal, if not a larger need, to regulate the broader skill gaming industry.
In December 2020, the NITI Aayog released the first-of-its-kind draft guidelines, titled ‘Guiding Principles for the Uniform National-Level Regulation of Online Fantasy Sports Platforms in India’.
These guidelines emphasise the need to differentiate between fantasy sports and online gaming, create an independent identity of the fantasy sports industry, and appoint a single-purpose self-regulatory industry body for governance.
As per the guidelines, the online fantasy sports sector is expected to contribute nearly Rs 10,000 crore to the Indian government over the next 2-3 years by way of taxes. And in the coming few years, it also has the potential to attract FDI of more than Rs 10,000 crore and generate additional 12,000 direct and indirect jobs.
In this regard, Niti Aayog had invited stakeholder comments on the draft by January 18, 2021.
Leading online skill gaming companies have expressed the need for a single self-regulatory body for India’s skill gaming sector.
In the key recommendations made by top skill game representatives to Niti Aayog’s report states that the current guidelines issued by the Niti Aayog cover fantasy games, which is a small part of a much larger online skill gaming industry. Given that each state will need to incorporate/agree with the idea of a “safe harbor”, it will be impossible to single out one online skill game whilst leaving the vast majority of the industry outside the ambit of such guidelines.
“Niti Aayog should broaden its consultation that encompasses all parts of the skill gaming industry and come out with a document that would address the industry’s concerns as a whole,” the recommendations further added.
Furthermore, NITI Aayog should propose not only to recognize self-regulatory industry bodies that represent operators that cover 66% of any specific type of gamers (like fantasy gamers or online rummy gamers) but also ensure that such industry bodies include the top 3 to 4 online operators in that game/segment.
An inclusive approach will assist in establishing the credibility of the self-regulatory regime and will ensure that competition and innovation can thrive within the limits of the law, the recommendations added.
Types of online skill games in India include Rummy, Backgammon, Chess, Spades, Tonk etc while few major fantasy sports players in India are Dream 11, MyTeam11, Mobile Premier League etc.
“Size of India’s overall online skill gaming industry is estimated to be around INR 5,250 crores, according to KPMG. The fast-growing skill-based games like Rummy account for approximately 50% of the overall industry revenues. Fantasy sports is a part of the overall skill gaming industry,” Sameer Barde, CEO, The Online Rummy Federation (TORF), the self-regulatory body for the country’s online rummy industry said while commenting on the need for a single self-regulatory body for the entire skill gaming industry.
He added, “At TORF, we have worked with global gaming regulatory experts from the US and Europe to design transparent, professional, and ethical operating standards for the online Rummy industry called the ‘Code of Conduct’. The aim is to prescribe and enforce a range of measures for online rummy operators that bring more responsibility to their operations and enhance their credibility and integrity, which we believe would also serve as a great starting point for the self-regulatory body for the industry.”
Notably, the Supreme Court has consistently held that skill games are legitimate and constitutionally protected commercial activities that can be played or organized for gain and profit.
Meanwhile, Vaibhav Kakkar, Partner at L&L Partners said, “The Supreme Court has since the 1960s distinguished games of skills from gambling and upheld the constitutional right to play and offer such games of skill. Once a game is determined to be a game of skill, its legality is undeniable and so is its ability to be played or organized for profit or gain.”
“Rummy has been held to be a game of skill by the Supreme Court and various High Courts. Similarly, various High Courts in very elaborate and detailed decisions, have also determined online fantasy leagues to be a game of skill,” Kakkar stated while commenting on the legality of skill games in India.