The Gaming Laws of India: Gambling, Social and Casual Gaming
Games, whether in the form of gambling, or popular social or casual games, are enjoyed by people of all age groups across the globe for their entertainment value. In fact, gambling, irrespective of its many vices, has been a part of the Indian culture since time immemorial. Even before the six side dice was invented, Indians used the nuts of the Bibhitaki tree as dice. References to gambling can be traced to the Mahabharata, one of India's oldest mythological epics, in which the opponents were tested based on their skills at board and dice games rather than through wars.
The gaming industry has witnessed a paradigm shift with the evolution of television, digital and online gaming models. Following the increased internet penetration in the mid-1990s, from being targeted at academics to being used by the general population, internet-based online games gained popularity. The Digital India drive under the aegis of the Modi government has led to improving the infrastructure as a whole. Better internet speed even in the remote areas has led to more consumption of content even where the mass population resides i.e. the rural areas. Post demonetization, the digital online payment systems received a boom with a larger part of the population being incentivized and compelled to use the same.
All these factors add to the huge potential of the market in India and has led to a surge in the number of online gaming sites over the last few years. The popularity of online gambling is best evidenced by the rapid growth of in the popularity of online card games, like Poker and Rummy and new age games like fantasy sports.
Mobile and online models received further impetus in India by the telecom revolution, penetration of internet and cable in substantial parts of the country, and the increasing popularity of new media with the masses. This huge size of the potential market in India has led to a surge in the number of online gaming sites over the last few years. The impact is evident by the rise in demand for quality game content, game developers, game developing companies and the gaming industry in general. Gaming as a whole is gaining increasing significance as a major source of income and a profitable business venture worldwide.
In a recent study by KPMG India and Google dated May 2017, it suggests that the Indian online gaming industry is set to become a USD 1 billion industry by 2021.1
There has been considerable increase in the Indian betting market which can be evidenced from the report issued by International Centre for Sports Security ("ICSS"), where ICSS claims that the betting market in India could be worth over US$130 billion.
Given the high growth potential of the gaming industry in India, many foreign entities are exploring possibilities to set up operations here. Similar trends are reflected in many industry related research reports which say that several global gaming firms have opened offices in India or have signed distribution agreements with leading Indian mobile game developers in order to distribute their products in India. While operating gaming businesses is easier in some countries of the world2 where gaming is legal, the situation is not so easy in India where the laws are stringent.
With the advent of social and casual games both offline and online, the 'gaming' industry can now be said to comprise of 2 verticals – gambling in both traditional and online forms, and skill based social or casual gaming.
In this paper, we discuss the scope of gambling / gaming laws and the evolution of the gambling / gaming industry in India. To clarify, in this paper we have used the term 'gaming' to refer to social and casual gaming. However, under certain Indian laws, gambling activities are referred to as 'gaming', and specific references to the same may be included in this paper.
1. Online Gaming in India: Reaching a New Pinnacle,A Study by KPMG in India and Google, available - https://assets.kpmg. com/content/dam/kpmg/in/pdf/2017/05/online-gaming.pdf.
2. A few examples include Macau, Nepal, U.K. etc.
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