Government Said to Plan Regulation of All Real-Money Online Games, to Include Games of Skill and Chance

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 much-awaited regulations are seen shaping the future of India's gaming sector that research firm Redseeer estimates will be worth $7 billion (roughly Rs. 57,000 crore) by 2026, dominated by real-money games. Tiger Global and Sequoia Capital have in recent years backed Indian startups Dream11 and Mobile Premier League, popular for fantasy cricket.

An Indian panel 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 planned 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 across India — were set to stay under the purview of individual state governments which would be free to regulate them, Reuters has previously reported.

But in an October 26 government meeting, an official from Prime Minister Narendra Modi'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.

Differentiating games as skill or chance wasn't easy due to lack of legal clarity and contrasting court decisions, the minutes quoted the official as saying, adding "online gaming may be considered as one activity/service with no distinction."

Defining games has been contentious in India. India's Supreme Court says the card game rummy and certain fantasy games are skill-based and legal, for example, while different state courts have held different views about games such as poker.

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

Three people directly involved in the rule-making process, including two government officials in New Delhi, told Reuters the rules will give the federal administration broader oversight on all types of games while state governments remain empowered to impose outright bans on gambling, or games of chance.

The drafting of the new regulations comes 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 of the government sources said Modi's administration continues to be concerned about the potential addiction of such platforms.

The government panel's August report had recommended new rules should include so-called "de-addiction measures" such as periodic warnings and advisories and fixing deposit and withdrawal limits.

© Thomson Reuters 2022