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TN Bans Online Games of Chance and Gambling

Context:

Online gambling and online games of chance have been banned in Tamil Nadu. At the same time, the other online games will be regulated.

Relevance:

GS II: Polity and Governance

Dimensions of the Article:

  1. Types of online gaming available in India:
  2. The requirement for a central law:
  3. How big is the online gaming market in India?
  4. Why are States resorting to banning online gaming?

Types of online gaming available in India:

  • e-Sports: These are video games that, in the 1990s, were played privately or on consoles in video game stores, but are now played online in a structured manner between professional players, either individually or in teams.
  • Fantasy sports: These are games in which the player chooses a team of real-life sports players from a variety of teams and earns points based on how well the players perform in real-life. As an example,
  • Casual online games:
    • These could be skill-based, with the outcome heavily influenced by mental or physical ability, or chance-based, with the outcome heavily influenced by some randomised activity, such as rolling a die.
    • Gambling is defined as a game of chance in which players bet money or anything of monetary value.

The requirement for a central law:

Online gaming so far has been a state subject:

  • State governments have said they find it extremely difficult to enforce certain rules like geo-blocking certain apps or websites within the territory of their state.
  • Also, there is a concern that rules passed in one state are not applicable in another, which has caused inconsistency in how the online gaming industry is regulated in the country.
  • State governments also do not have enough blocking powers like the Centre to issue blocking orders for offshore betting sites.

Societal concerns

  • Stakeholders have highlighted a number of societal concerns that can arise from the proliferation of online games in the country.
  • There have been a number of reported incidents of people losing large sums of money on online games, leading to suicides in various parts of the country.

No regulatory framework

  • There is currently no regulatory framework to govern various aspects of online gaming companies such as having a grievance redressal mechanism, implementing player protection measures, protection of data and intellectual property rights, and prohibiting misleading advertisements.
  • For online gaming businesses, the inconsistency has led to uncertainty.
  • The thinking within the government is to have a nodal agency that will address all issues related to online gaming, including introducing a uniform law to determine what forms of online gaming are legally allowed.

How big is the online gaming market in India?

  • The revenue of the Indian mobile gaming industry is expected to exceed $1.5 billion in 2022, and is estimated to reach $5 billion in 2025.
  • The industry in the country grew at a CAGR of 38% between 2017-2020, as opposed to 8% in China and 10% in the US.
  • It is expected to grow at a CAGR of 15% to reach Rs 153 billion in revenue by 2024.
  • India’s percentage of new paying users (NPUs) in gaming has been the fastest growing in the world for two consecutive years, at 40% in 2020 and reaching 50% in 2021.

Why are States resorting to banning online gaming?

  • Online games like rummy and poker are addictive in nature;
    • When played with monetary stakes leads to depression, mounting debts and suicides.
  • Reportedly, there have been a few instances where youngsters, faced with mounting debts due to losses in online games have committed other crimes like theft and murder.
  • Some experts also believe that online games are susceptible to manipulation by the websites operating such games and that there is a possibility that users are not playing such games against other players, but against automatic machines or ‘bots’, wherein there is no fair opportunity for an ordinary user to win the game.

-Source: The Hindu


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December 2022
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