INVESTING IN INDIA: AN IGAMING NIRVANA

WITH THE ADVENT OF COVID-19 LOCKDOWNS CULTIVATING A NEW WORLD OF ONLINE ENTERTAINMENT, INDIA’S GAMBLING MARKETS ARE THRIVING. HOWEVER, GROWTH BRINGS ABOUT CHALLENGES. JAYDEEP CHAKRAVARTTY, VICE PRESIDENT FOR MARKOR TECHNOLOGY BELIEVES THAT THE TIME IS RIGHT TO INTRODUCE REGULATION TO THIS BILLION DOLLAR INDUSTRY.

The wheel of time (also known as Kalachakra) is a concept found in several Indic traditions and philosophies which regard time as cyclical. Misery brought about by the COVID-19 pandemic is unimaginable. Our way of life was impacted, and the harsh lockdown which was imposed in many countries brought all industries to a standstill. However, there is one industry - online gaming, which managed to beat this Kalachakra and not only survived but flourished during this pandemic.

Gaming companies focusing on the Indian market saw a huge jump in traffic and player activities during the lockdown, as online gaming pushed its way into our bedroom and became a popular option for stay-at-home entertainment. Home Grown Ludo King became the most downloaded Gaming App in past 6 months beating PUBG (which has now been banned by the Indian Government due to security concerns).

Three verticals presently dominate the Indian Online RMG industry: Online Rummy (Key Players: Rummy Circle, Ace2three, Junglee Rummy etc.), Online Poker (Key Players: Adda52, Spartan Poker, PokerBaazi etc.) and Online Daily Fantasy Sports (Key Players: Dream11, MyTeam11, Halaplay etc.). Many of these companies have raised capital and got investments, like The Chinese Technology giant, Tencent is a big investor in Dream11, Matrix has invested in Ace2Three, Nazara Technologies have invested in Halaplay and so on.

The Path To Nirvana

It is widely acknowledged that the betting market in India is worth hundreds of billions of dollars. No one has been able to provide a correct estimation as most of this market is underground. Cricket is not just a mere sport in India; it has become part of Indian culture. The Indian Premier League (IPL) was able to capitalise on the love for cricket and created a multi-billion-dollar cricket league. The rise of IPL also resulted in a multifold rise in betting in cricket matches. There have been allegations of spot fixing, match fixing, which is also linked with illegal betting activities and is considered blasphemous.

The Law Commission of India on 5thJuly 2018 released a Report on “Legal Framework: Gambling and Sports Betting in India." The Commission prepared this report in pursuance of the Supreme Court's order, wherein the Apex Court had asked the Law Commission to study the possibility of legalising betting in India. The Commission has recommended regulating gambling and sports betting in India.

Regulating sports betting and online gaming will not only bring transparency in betting activities but will also generate huge tax revenues for the government, which can then be spent on social causes.

Bad Apples

With 380M+ English speaking populations and with 750M+ Internet connections, India is fast becoming an attractive choice for gaming operators who are otherwise struggling with the ever-increasing regulations and increase in gaming taxes in regulated markets. With the acceptance of technology, internet has opened a new world for most Indians. We are now relying on the internet for most of our daily life, and smart phones have become a part of our identity.

Online gaming has also become a preferred entertainment option for many Indians. However, due to lack of regulations, a lot of fly by operators are now in the market. An Eastern Europe based operator is using Bollywood celebrities’ images in marketing banners without their approval. A few well-known gaming brands with MGA and UKGC licenses and following best practices in Europe are resorting to questionable marketing techniques. We have seen ads claiming that the CEO of a listed gaming brand has been fired for paying out huge bonuses to players or that a KFC employee has left his job after winning huge amounts of money etc. which then links to these well-known gaming brands. It was very disheartening to see such reputed brands following morally questionable marketing practices as the market is not regulated.

Gaming is always considered as entertainment. However, rogue operators or questionable marketing practices will equate gaming with scams. There are already allegations of irregularities in cricket matches, which is then linked to betting. This will further complicate the process of setting up any gaming and sports betting regulation in India.

As an industry, we should push for regulation as it promotes responsible gaming, offers player protection, and generates tax for the government. Justice (retd) BS Chauhan, who chaired The Law Commission of India, had mentioned that "regulated gambling would ensure detection of fraud and money laundering."

The Indian gaming market is set to grow, and it will bring good rewards to those who follow the rule of law and offer the same level of services, player protection and processes that they follow in other regulated gaming markets.