Gambling concern as Indian companies bet big on online games

Millions of Indians are attracted to games involving monetary transactions

Months after Faisal Maqbool quit playing online games on his smartphone, he’s still struggling with temptation.

Last year, the 31-year-old – project coordinator at a construction company – lost almost 400,000 rupees ($5,000; £4,010) in five months playing an online card game. These are multi-player games that deal you a deck of cards and have you place a bet.

“You start with 500 or 1,000 rupees. Then greed takes over and you bet more and more until you get sucked in. You keep playing because you want to win back the money you lost. But you keep losing,” says Maqbool.

There was a time when he lost nearly 70% of his $500 monthly salary to these online games, forcing him to borrow money from friends.

Mr Maqbool is among the millions of Indians who are attracted to so-called real money games (RMG) in which the user plays for a bet.

These easily accessible games make up almost 80% of the country’s online gambling industry, according to the E-Gaming Federation of India (EGF), an industry organization that advocates for self-regulation of this booming sector.

While groups such as the EGF say Mr Maqbool and others “bet” their money on online games, critics have a harsher word for it – gambling.

“Any online game is ultimately betting money against the occurrence or non-occurrence of an event that is not in our control. Everything remains uncertain and by its very nature , it’s a game,” says Siddhartha Iyer, a Supreme Court lawyer who fought to ban and block these websites.

Gambling is illegal in India. Some Indian states such as Odisha, Andhra Pradesh and Telangana have banned such games, citing mental health and addiction issues. In others, like Kerala and Karnataka, courts have overturned state bans.

A series of petitions on the issue are pending in the country’s Supreme Court.

The Chief Minister of the southern state of Tamil Nadu, MP Stalin, has repeatedly called for the games to be banned. The state government says it is committed to banning online gambling.

“We have gone to the Supreme Court to uphold the law enacted by the government. Hopefully they will give a good verdict on our appeal,” he added. The PTI news agency quoted the state’s Justice Minister, S Regupathy as told in the state assembly in March.

The All India Gaming Federation (AIGF) – which calls itself the apex body for online games of skill – says it is essential to differentiate between gambling and “online game of skill”, where the element of skill outweighs the element of luck.

Children play an online internet game, Player Unknown's Battlegrounds (PUBG), developed by a South Korean company

India’s online gaming industry is growing at nearly 30% annually, making it the fastest growing segment of the media and entertainment industry.

AIGF CEO Roland Landers explains the difference with an example from cricket.

“When you watch cricket, pitching in cricket is a game of chance. But the rest of the game is [based] entirely [on] jurisdiction,” he says, adding that gambling apps have disclaimers warning players to limit their use of money.

The transactions made by the participants, he argues, amount to entry fees.

“It’s not because someone pays an entrance fee for some form of entertainment [gaming] – which many have called one of the world’s greatest hobbies – that doesn’t mean it equates to gambling,” he says, adding that it would be counterproductive to ignore the enormous commercial potential of games in a booming industry.

India’s online gaming industry is growing at nearly 30% annually, making it the fastest growing segment of the media and entertainment industry. The industry also has over 400 million users. AIGF estimates that the online gaming industry earns around $1 billion a year and has the potential to create almost 50,000 jobs by 2025.

The industry was also boosted by massive advertising campaigns by top cricketers.

“When I see my favorite cricket star promoting a game I love, it makes me want to try it out,” says Mr Maqbool.

But critics are concerned.

“A game of skill should be reserved for something of high athletic ability or high mental capacity that requires years of training, practice and perseverance,” Mr. Iyer said.

AIGF says a booming gaming industry requires game developers, IT support, and massive customer service teams to keep up with growing subscriber numbers. So, instead of a full ban, he says he’s open to working with lawmakers to draft regulations.

Mr Landers proposes taxing income from the industry which he says could help economic recovery in a cash-strapped post-pandemic world.

There is also a self-regulatory framework within which these games operate, but lawyers say that is not enough.

“Self-regulation is a very dangerous thing in an industry that essentially depends on exploiting its users, just as the alcohol industry depends on an alcoholic to buy more alcohol,” Mr Iyer said. .

An Indian visitor plays video games during the "India Gaming Show"  exhibition in New Delhi on February 4, 2019

Gambling regulators and watchdogs say India’s gambling industry needs tougher regulations

But making such laws in India is easier said than done.

The federal government is responsible for all internet-related laws, while gambling laws are governed by individual states. This means that the Indian parliament can only intervene if all states agree to pass an online betting and gambling law.

“The problem is gambling laws have to be enforced on the internet, now who is going to do it? Is the central government going to do it, is the state government going to do it? What happened in the end was that no one is doing it,” says Mr. Iyer.

Although the government has not yet taken a position on the issue, the gambling federation and lawyers who want a ban agree that this booming sector needs regulation not only to protect trading potential, but also to add a layer of protection for players and prevent them from losing their savings.

Groups such as AIGF say it is the participants’ responsibility to protect themselves.

“If you’re choosing this for entertainment or for any other reason, even with the prospect of maybe earning back, I’d say you need to make an informed decision,” Landers says.

Mr Maqbool says he hopes these companies will be forced to become more responsible. Until then, he has a warning for others like him.

“It’s a vicious circle.”

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