Karnataka’s proposed ban is a cause of concern for the fast-growing online gaming sector (Representational)
Bangalore:
Karnataka has proposed a ban on betting and online games involving betting, raising concerns that the state’s increasing regulations could affect the nascent but booming sector.
Proposing amendments to the Karnataka Police Act to include such online games, Karnataka seeks to ban “any act of risking money, or otherwise, at an unknown consequence of an event, including games of skill”. is demanding. by Reuters.
Many offenses under the law already attract jail time, and the bill proposes to increase these penalties. The Karnataka government has said the bill is needed as youth from rural areas, who are mostly idle during the COVID-19 pandemic in the city, “have shown a tendency to become habit gamblers”.
The proposed ban comes as online fantasy gaming platforms such as Tiger Global-backed Dream11 and Sequoia Capital-funded Mobile Premier League (MPL) that offer fantasy cricket and football games in India have become increasingly popular.
Bengaluru, home to some of the world’s biggest tech companies and the country’s tech capital, is the fourth Indian state after Telangana, Tamil Nadu and Andhra Pradesh to ban online games involving prize money.
All three states have banned online gaming offering cash rewards over the years, though Tamil Nadu’s bill was later struck down by its high court.
“The business of MPL, Dream11 and everyone in this sector will be affected,” said a gaming industry source. “These states are important – they account for about 20% (total) business for such companies.”
The online gaming industry in India has evolved over the years. Foreign investors have shown increasing interest in backing Indian gaming startups since last year, as the COVID-19 pandemic has forced people to stay indoors for such games.
According to the EY-All India Gaming Federation report, there are currently over 400 online gaming startups in India and as of 2020, there were around 360 million gamers.
The report states that online gamers are expected to grow to 510 million by 2022 and the industry will be worth $2 billion by 2023.
The Dream11 and MPL platforms, offering paid competition with cash prizes for players, have expanded rapidly in recent months with extensive marketing and rentals.
Local media have said that Dream11 is seeking to be listed in the US by early next year. Such growth has given rise to concerns that these platforms such as gambling are addictive and can cause financial harm.
Such laws have a weak legal position, said Sandeep Chillana, a New Delhi-based lawyer, as the Supreme Court has repeatedly said that skill sports – such as fantasy cricket – are not like gambling, which is rampant across India. is restricted.
“Indian states are going ahead and will face legal challenges by banning such skill games,” Mr. Chillana said.
Karnataka’s offer during the Indian Premier League (IPL) also comes at an inconvenient time for the industry. The fantasy gaming competition surrounding the tournament is one of the biggest fee generators for online gaming companies, said a second industry source, who asked not to be identified.
The e-sports Players Welfare Association, a non-profit organization for online gamers, said the potential ban would harm professional players as well. “Sports and e-sports are areas where skills can be developed, resulting in it not being a sin activity,” the group said.
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