Recent years have seen enormous growth in India’s online gaming industry. A significant amount of interest has been generated among young people in fantasy sports and e-sports, among other forms of online gaming. Winning these games can lead to monetary rewards, which is one of the factors that make these games appealing. Numerous questions have been raised before the courts in recent years, including questions about the effects of online gaming on players’ mental health, celebrities endorsing these games, the validity of a blanket ban, etc. In the last two years, there has been an uptick in litigation surrounding all of these aspects of online games. As a result of mass internet penetration supported by cheap data services offered by telecommunications companies, online gaming is expected to rise exponentially in the upcoming years.
Does online gaming equate to online gambling?
In recent years, a number of cases have been filed in the High Court in relation to whether certain online games amount to gambling.
In the last two years, there has been an uptick in litigation surrounding all of these aspects of online games. Mass internet penetration, enabled by cheap data prices from telecom companies, is expected to lead to an exponential rise in the number of online gamers in the years to come.
Earlier this year, a PIL was filed alleging tax evasion against cricket and football fantasy game Dream11. In a decision in favor of the gaming company, the Bombay High Court noted that the selection of a team did not involve a service, and, therefore, the Goods and Service Act did not apply. It was also found that the game was not a game of chance, but rather one of skill, and therefore playing the game is not gambling.
On another occasion, the Madras High Court noted in an application concerning Online Rummy that since the game is based on algorithms, it could not be regarded as a game of skill. The Court was informed that those who play these games fall victim to having their data manipulated by the database algorithms and that once one has been marked as a victim, they cannot make any money. Furthermore, it was stressed that Online Rummy can’t be compared to the physical game of Rummy, which requires skill. Further, the petitioner contended that when skill-based games are played online for money, it is illegal since there is a high possibility of manipulation, randomness, cheating, and collusion in a virtual setting.
Recently, the Maharashtra government was requested to respond to a plea that declared Ludo to be a game of chance instead of skill. The petitioner noted that a 3-year-old can win the game and that Ludo is, therefore, a game of chance. This means that the Maharashtra Prevention of Gambling (MPG) Act will apply since it is a game with stakes. The format of the game was comparable to the original board game, with the difference being that there was an entry fee and the winner was awarded money in the real-time currency of value. The role of the dice and the value of the dice is controlled entirely by the application. It was argued in the plea that the entire game is based on luck only so that it is a game of chance.
Despite the common perception that playing video games over an extended period of time is bad for one’s physical and mental health, an Oxford University study found that it can actually be beneficial. According to a study published earlier this month by Professor Andrew Przybylski of the Oxford Internet Institute, University of Oxford, video games might not be as bad for health as other psychological factors. There is evidence that playing itself is beneficial to a person’s wellbeing. As the government contemplates the possibility of imposing a ban on a game, defining it as betting or gambling, it is vital to understand what it means to play a “game of skill”.As an example, Rummy has been a part of our culture for decades, and many of us learned it from our grandparents. The game has been passed down from generation to generation. When these games are available on a digital platform, banning them doesn’t do them justice. It has led to dissatisfaction among Indian gamers and even been questioned by self-regulating bodies like the Online Rummy Federation and the All India Gaming Federation. In this case, the Supreme Court has classified rummy as a skill-based game, which is protected by law just like any other e-commerce business.
During the last few years, we have seen the world’s interest in India’s gaming industry grow, which could further boost its sales. We should not overlook the fact that India has a young population and favorable demography. With such a young population, India offers many opportunities across different value chains.