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Report: Government of India Plans to Regulate All Real Money Online Games

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According to a recent report by Reuters, the Government of India has decided to regulate all real money online games, including games of skill and games of chance. Reportedly, this step was taken after the Prime Minister’s office (PMO) overruled a proposal to only regulate games of skill and leave out games of chance. Notably, in 2022, the Indian gaming industry has seen a year-on-year growth of 31.9% in revenue generation from 2021. A significant chunk of this revenue generation can be credited to Real Money Gaming companies like Dream11 and Mobile Premier League (MPL) which are backed by venture capital and investment firms Tiger Global and Sequoia Capital as well as games of skill like Poker and Rummy (that are being promoted as electronic games)

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Indian government to regulate games of chance as well as skill

The government established a panel in August to set up a draft of regulations for the gaming industry. This new panel proposed a new body to determine if a game is based on skill or chance. The body recommended that the skill-based games should be regulated by rules and regulations given by the government that calls for mandatory registrations, KYC (Know Your Customer) standards, and a grievance redress mechanism.

It is important to note that games of chance come under the umbrella of gambling, and gambling is banned in India, aside from a few states and union territories. According to Reuters, if the federal government had decided to regulate only games of skill, the games of chance would have come under the regulations of state governments. However, it is not the case, and now, the government will regulate both games of skill and games of chance. 

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Due to a lack of legal clarity, differentiating games of skill and games of chance is a difficult task. In a government meeting on 26th October, an official from the PMO objected to any differentiation, calling for expanded oversight on all types of games, according to the confidential minutes of the gathering reviewed by Reuters. The minutes quoted the official saying, “online gaming may be considered as one activity/service with no distinction.”

The same regulation might not be the most convenient form of regulation for both games of chance as well as games of skills. Although both categories come under online gaming, there is a massive difference between them. Furthermore, as the Indian gaming industry is growing at such an incredible pace, an unsuitable framework might cause some hindrances in the industry.