A week back Karnataka legislative assembly passed a bill to amend the Karnataka Police Act, 1963 to ban all forms of online betting on sports, online gaming, poker and so on. According to Startup Business Academy the bill in Karnataka will impact all gaming formats including strategy games and esports. While the bill proposes to ban online gambling, what in effect has happened is that it has banned everything, including skill games. At present, Karnataka is home to more than 91 gaming companies and developers, which employ about 4,000 people. The Bill will have a severe impact on these companies, in the form of revenue and job loss, and stifle the growth of this sector, not to miss the cascading impact on the entire start-up ecosystem and IT sector in the region, as gaming is today the number one magnet for attracting global investments in India. Bangalore’ image as a startup hub will be adversely affected by the recent controversy around the ban on online gaming in Karnataka, according to a study conducted by Startup Business Academy, among the startup community in India.
Startup Business Academy, an organisation focused on enabling startup entrepreneurs to rapidly scale up, conducted a study among 650+ respondents. An overwhelming majority of the surveyed said that not only will the ban affect Bangalore’s image but it will also have a cascading effect of gaming ban on other start-up and IT segments.
Startup Business Academy founder and CEO Neeraj Kapoor, said, “Karnataka, led by the city of Bengaluru has been India’s flag bearer as a global hub for IT development and start-ups on the back of a vibrant private enterprise led by young, energetic entrepreneurs. The recent developments threaten the State of Karnataka’s pole position as compared to other Indian states when it comes to its friendliness and readiness to drive the next level of growth from IT and related services.”
Here are the key findings of the survey:
- 78.9 per cent thinks Karnataka’s image as a gaming startup hub has affected because of recent bill on banning online gaming in Karnataka.
- 80.4 per cent agree that Indian’s Silicon Valley Bengaluru’s reputation will suffer if gaming startups from the city moves to different cities due to policy issues
- 69 per cent thinks there will be high negative impact on gaming sector and it will cause a cascading negative effect on the other segments of Bengaluru Startup ecosystem. Whereas 15.9 per cent also thinks there will be moderate impact and 14.4 per cent thinks it will cause no negative impact at all.
- 68.8 per cent strongly agree and 20.8 per cent somewhat agree that Bengaluru will eventually lose its attractiveness for start-ups because of a multitude of compounding factors such as problems of infrastructure, traffic, lack of public transport and lack of clear startup friendly state government policy.
- 67.1 per cent believes that the emergence and the role played by the private enterprises and IT entrepreneurs in the city have made Bengaluru the global startup hub
- 32.9 per cent believes that the progressive policies of the government of Karnataka and sops are the real reason behind the success of Bengaluru as the global startup hub
- 26.5 per cent believes lack of state focus in improving the city infrastructure to keep pace with the growing needs, 9.3 per cent believes growing congestion and crumbling traffic system,30.8 per cent believes over regulation of fast growing investment segments like gaming, 33.4 per cent believes that dwindling interest among big ticket startup investors are the strongest reasons that Bengaluru potentially losing out to cities like Delhi NCR, Pune, Hyderabad, Chennai as the attractive destination for startup founders and talent pool.