Too much regulation could hamper growth, say gaming companies as govt draws up guidelines

ET reported earlier this month that an inter-ministerial task force had suggested that the ministry of electronics and IT (MEITY) amend the Information Technology Act of 2000 to include rules for the gaming sector, similar to how the Intermediary Guidelines and Digital Media Ethics Code were introduced in February 2021.

“There is a need to ensure that legitimate operators are protected and the illegitimate ones are weeded out,” said Sameer Barde, CEO, E-Gaming Federation (EGF). He added that the guidelines should be balanced and not be over prescriptive in nature. “Otherwise, gamers will turn to fly by night operators where they are at extreme risk. Players have to be protected, that’s non-negotiable, as is data privacy and security,” he said.

India is currently home to about 420 million gamers and 400 gaming companies, as per a study by KPMG, making it among the fastest growing markets globally. A recent report by BCG and Sequoia India said that the industry currently generates $1.5 billion in revenue, and this is slated to grow to $5 billion by 2025.

Over the last few years, there has been some amount of self-regulation, at least among the larger operators, and some of the likely rules around geo-fencing and KYC norms are already in place. While companies have welcomed the move to introduce regulations, they are concerned about too much regulation hampering the growth of the sector.

“This would also give the required stability for attracting more FDI in the sector and create a robust and reliable framework for the operation of gaming companies in the domain,” said Gaurav Kapoor, CFO, Baazi Games, which runs PokerBaazi.com, among the country’s largest poker platforms.

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However, he said that it was too early to have stringent caps on daily spends. At present, some operators allow players to set a monthly cap on how much they want to spend and ensure only a third of this can be spent in a day. The regulations could come up with a predefined amount that can be spent in a month.

“In a country like India, it’s too early to implement caps on spending. Also, gaming now is a bigger universe and there are multiple games and formats that are played, gaming is also considered a profession by many individuals across the globe and the adoption is gradually growing in India,” said Kapoor. He added that companies should have stringent KYC checks at the time of user deposits to ensure that they are playing within their limits.

Bringing in regulation would help enforce uniform compliance across the ecosystem, said Roland Landers, CEO, All India Gaming Federation. “A potential regulation could require the gaming platforms to ensure that there are no bots involved in the gameplay as well as there are anti-fraud detection mechanisms in place. Additionally, requirements of random number generator certification, self-exclusion measures and time-spent warnings can also be brought through regulations,” he said.