Why Are Regulations Needed for All Online Skill Games, Not Just Fantasy

Niti Aayog has recently pitched for setting up a single self-regulatory body for the online fantasy sports industry to be governed by the independent oversight board and also had suggested restricting online fantasy games to users of 18 years and above. However, the gaming industry recommends Niti Aayog guidelines cover all online skill games, and not just single out fantasy games.

In a draft report titled ‘Guiding Principles for the Uniform National-Level Regulation of Online Fantasy Sports Platforms in India’, the body had said that there is a public interest in the fantasy sports industry receiving the government recognition as an industry and having its own identity. “A single self-regulatory organization for the fantasy sports industry should be recognized by the government,” it added.

There’s no denying that sports fans have welcomed the innovation of fantasy sports. The sector saw a growth of 2 Million user base in 2016 to 90 Million in 2019. The competition in the space has also increased manifold, from less than 10 operators in 2016 to over 140 at the end of 2019, and the market is teeming with each passing day.

However, experts believe, the current guidelines issued by the Niti Aayog cover fantasy games, is only a small part of a much larger online skill gaming industry. Given that each state will need to agree with the idea of a “safe harbor”, it will be impossible to single out one online skill game whilst leaving the vast majority of the industry outside the ambit of such guidelines.

The Online Rummy Federation (TORF) in a statement said like fantasy sports, India’s skill gaming industry suffers from the same byzantine set of state-by-state laws and regulations. “There is an equal, if not a larger need, to regulate the broader skill gaming industry,” it said.

The Supreme Court has consistently held that skill games are legitimate and constitutionally protected commercial activities that can be played or organized for gain and profit.

India’s online skill gaming industry proposes standardized rules and regulations to attract foreign investments, create jobs, and eliminate unscrupulous operators to position India as the skill gaming hub of the world. Therefore experts in the industry propose that Niti Aayog should broaden its consultation that encompasses all parts of the skill gaming industry and come out with a document that would address the industry’s concerns as a whole.

Games24x7 co-founder and CEO Bhavin Pandya, said, “Given the significant overlap between fantasy sports and other games of skill (which today include games like pool, carrom, quiz games, etc., in addition to Rummy), we believe that Niti Aayog’s draft paper should include the broader skill gaming industry.”

The online skill games industry has been repeatedly exposed to regulatory uncertainties in various states despite clear protection under Article 19(1)(g) of the Constitution of India, as has been cited in the guidelines. Constitutional protection is equally available to all constituents of the broader Skill Gaming Industry.

In this context, Deepak Gullapalli, CEO of Head Digital Works that operates online rummy brand A23 and fantasy sports platform Fanfight, said the gaming industry in India has attracted several marquee investors who have supported the development of the overall market.

“A common self-regulatory body will result in the removal of a lot of uncertainty for foreign investors, spur foreign investment to the tune of a few billion dollars, drive innovation, employment and taxes,” he said.

Further, the skill gaming sector has also fostered a strong entrepreneurial culture in India, as Junglee Games founder and CEO Ankush Gera said there has been a huge spurt in entrepreneurial activity recently, with over 275 game development startups active today.

“This is more than a 10x increase in the number of industry players in the last ten years. The gaming industry employs over 50,000 highly qualified technologies, design, and product development resources,” he said.

Sai Srinivas, CEO, MPL too noted that fantasy sports is a game of skill, and the business model of fantasy sports is no different from that of other games of skill like carrom, pool, chess, shooting etc., and in fact the entire Esports industry. So it only makes sense to regulate all games of skill together and democratize the wider ambit of Esports, especially given its inclusion in the upcoming Asian Games. We commend Niti Aayog for its leadership in this regard and hope to present the case for public interest in regulating all skill games and Esports together.”

To sum it up, Niti Aayog should propose not only to recognize self-regulatory industry bodies that represent operators that cover 66% of any specific type of gamers (like fantasy gamers or online rummy gamers) but also ensure that such industry bodies include the top 3 to 4 online operators in that segment. An inclusive approach will assist in establishing the credibility of the self-regulatory regime will ensure that competition and innovation can thrive within the limits of the law.