India to regulate online gaming after PM Modi overruled proposal

India to regulate online gaming after PM Modi overruled proposal

NEW DELHI Reuters - India's planned regulation of online gaming will apply to all real-money games, after the prime minister's office overruled a proposal to only regulate games of skill and leave out games of chance, according to a government document and three sources.

The research firm Redseeer estimates that real-money games will be worth $7 billion by the year 2026 in India's gaming sector. Tiger Global and Sequoia Capital have backed Indian startups Dream 11 and Mobile Premier League, popular for fantasy cricket.

A body tasked with drafting the regulation in August proposed a new body to decide whether a game involves skill or chance, and then let skill games be governed by federal rules that call for registration requirements, know-your-customer norms and a grievance redress mechanism.

Chance games - considered akin to gambling, which is mostly banned in India - were set to stay under the purview of individual state governments, which would be free to regulate them, according to a report by Reuters.

An official from the prime minister's office objected to such a differentiation, calling for expanded oversight on all types of games, according to the confidential minutes of the gathering reviewed by Reuters.

The minutes quoted the official as saying that online gaming may be considered an activity service with no distinction, because it was not easy to distinguish games as skill or chance due to lack of legal clarity and contrasting court decisions. In India, Defining games has been contentious. India's Supreme Court says that card game rummy and certain fantasy games are skill-based and legal, for example, while different state courts have held different views on games such as poker.

Modi's office and IT ministry, which is drafting the rules, did not respond to a request for comment.

Three government officials in New Delhi, who are directly involved in the rule-making process, told Reuters that the rules will give the federal administration more control over all types of games while state governments are empowered to impose outright bans on gambling or games of chance.

The new regulations were drafted amid growing concerns that the proliferation of such games, particularly among young people, had led to addiction and financial losses, with some reported cases of suicide.

One government source said that Modi's administration is concerned about potential addiction of such platforms.

The August report by the government panel recommended new rules should include so-called de-addiction measures such as periodic warnings and advisories and fix deposit and withdrawal limits.