The gaming industry recommends Niti Aayog guidelines cover all online skill games and not just fantasy games

The online skill gaming industry recommends government think tank Niti Aayog  to set up a single self-regulatory body to standardise regulations governing the entire skill gaming  industry. 

Like fantasy sports, India’s skill gaming industry suffers from the same byzantine set of state-by-state  laws and regulations. There is an equal, if not a larger need, to regulate the broader skill gaming industry.  In a draft report titled “Guiding Principles for the Uniform National-Level Regulation of Online Fantasy  Sports Platforms in India”, Niti Aayog has suggested setting up a single self-regulatory body for fantasy  sports. The think tank has invited stakeholder comments on the draft by 18January, 2021. 

Commenting on the need for a single self-regulatory body for the entire skill gaming industry, The Online Rummy Federation, CEO Sameer  Barde, the selfregulatory body for the country’s online rummy  industry, said: 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 per cent of the overall industry revenues. Fantasy sports is a part of the overall skill gaming industry. 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.” 

The Supreme Court has consistently held that skill games are legitimate and constitutionally protected  commercial activities that can be played or organised for gain and profit. 

Commenting on the legality of skill games in India, 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. Various Supreme  Court as well as High Court decisions lend credence to this proposition. 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.  Currently, the mode of operation of fantasy games and other online games of skill remains the same- the  gaming companies provide an online platform to play the skill-based games in lieu of a platform fee.  Based on established legal jurisprudence of more than 60 years, as well as recognized global principles,  we expect the Supreme Court to also follow the same rationale as that of the High Courts and endorse  fantasy leagues as a game of skill in the current litigation.”

Leading online skill gaming companies have expressed the need for a single self-regulatory body for  India’s skill gaming sector. 

Commenting on the contribution of skill gaming industry to government’s pro-growth vision, job  creation, and FDI strategy, Games24x7 Co-founder and CEO, Bhavin Pandya,  said: “The online skill gaming industry has tremendous potential to provide a healthy,  responsible form of entertainment. The broader skill gaming industry has been attracting a lot of foreign  investment from aggressive global players like Sequoia, Tiger Global, Accel Partners, Raine Capital,  Clairvest, Westbridge Capital, Kalaari Capital, Bennett Coleman, Blume Ventures, and Kae Capital, to name a few. Over Rs. 5,000 crores in foreign investments has already come into the country in the overall  skill gaming industry, with over ten non-fantasy sports companies having successfully raised capital. In  comparison, only two fantasy sports players have attracted FDI. Given the significant overlap between fantasy sports and other games of skill (which today include games  like pool, carrom, quiz games, and more, in addition to Rummy), we believe that Niti Aayog’s draft paper should  include the broader skill gaming industry. Such an approach would produce tremendous benefits for the  country. Standardized rules and regulations for India’s entire skill gaming industry will ensure that the  tens of millions of players in India get service from responsible operators. It will eliminate the vast number  of illegal and unscrupulous operators that are now serving the Indian market. This move will help  generate over Rs. 10,000 crores in direct and indirect taxes annually for the government by 2025, and  create thousands of jobs through direct and indirect employment.” 

Commenting on the recent development of Esports inclusion in the upcoming Asian Games, MPL CEO Sai  Srinivas said:Fantasy sports is a game of skill, and the business model of fantasy sports is no  different from that of other games of skill like carrom, pool, chess, shooting etc., and in fact the entire  Esports industry. Players join tournaments in an e-stadium like MPL and compete for recognition and  rewards like any other skill game or Esport. So it only makes sense to regulate all games of skill together  and democratize the wider ambit of Esports, especially given its inclusion in the upcoming Asian Games.  We commend NITI Aayog for its leadership in this regard and hope to present the case for public interest  in regulating all skill games and Esports together.” 

Commenting on the contribution of skill games to India’s gaming revenues, PayTM First Games  Spokesperson said: With 400 million gamers, India is one the fastest growing online gaming markets  globally. Several factors such as young demographics, increasing Internet penetration, diversity of  content, and the immersive nature of gaming entertainment would continue to drive the market growth  in the future. Today, 75 per cent of the $1.2 billion in India’s gaming revenues come from skill games that  dominate customer engagement. And that regulatory clarity will spur the creation of a new class of skill  games and entertainment for India.” 

Commenting on investor bullishness in skill gaming, Head Digital Works CEO Deepak Gullapalli, said: “Gaming  industry in India has attracted several marquee investors who have supported the development of the overall market. This is in line with the government’s agenda to spur foreign investment, jobs, and  innovation. More than 60% of the companies that have raised equity are non-fantasy sports players. A  common self-regulatory body will result in the removal of a lot of uncertainty for foreign investors, spur  foreign investment to the tune of a few billion dollars, drive innovation, employment and taxes.” 

Commenting on the growth of an entrepreneurial culture driven by skill gaming in India,  Junglee Games, founder and CEO Ankush Gera,   which has close to 50 million users and operates the fastest  growing Fantasy Sports and Rummy brands said: There has been a huge spurt in entrepreneurial  activity recently, with over 275 game development startups active today. This is more than a 10x increase  in the number of industry players in the last ten years. The gaming industry employs over 50,000 highly  qualified technologies, design, and product development resources and will empower the next generation  of startups and entrepreneurs in India.” 

The key observations and recommendations by top skill game representatives to Niti Aayog’s report  include: 

1) The online skill games industry is, and will continue to generate substantial growth in employment,  tax revenues, and investment. This industry has been repeatedly exposed to regulatory uncertainties in  various states despite clear protection under Article 19(1)(g) of the Constitution of India, as has been  cited in the guidelines. Constitutional protection is equally available to all constituents of the broader  Skill Gaming Industry. 

2) 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. 

3) NITI Aayog should propose not only to recognize self-regulatory industry bodies that represent  operators that cover 66per cent of any specific type of gamers (like fantasy gamers or online rummy gamers)  but also ensure that such industry bodies include the top three to four online operators in that game/segment.  An inclusive approach will assist in establishing the credibility of the self-regulatory regime will ensure  that competition and innovation can thrive within the limits of the law.