Need central-level uniform regulation for gaming sector: Winzo Cofounder

Currently, several states have their own sets of norms for the industry

The gaming sector should be guided by regulations that are centrally driven instead of state-specific laws and rules because that helps companies focus their energies on innovating for end-users, according to homegrown gaming company Winzo’s co-founder Saumya Singh Rathore.

 

“The potential of the country in this sector is extremely big, and (regulations) cannot be so fragmented. Currently, this ecosystem has very young, fresh, first-generation entrepreneurs. They cannot navigate through the complex regulatory environment. Their focus should be to build a product that will win the world. We understand states regulate gambling, i.e., games of chance such as casinos and lottery, and the Centre holds power to regulate gaming, irrespective of the monetisation models involved,” Rathore told Business Standard in an interview. 

 

Currently, several states have their own rules for the sector in the absence of regulations determined by the central government. Though the government had in 2023 amended the Information Technology Rules of 2021 to introduce an umbrella regulatory framework for online gaming, the proposed rules were never put in place.

 

Over the next two years, several states, including Tamil Nadu, banned games such as online poker and rummy. In February this year, the Tamil Nadu Online Gaming Authority (TNOGA) came up with regulations for online real-money games, which included imposing dark hours between midnight and 5 am.

 

In its order, the TNOGA said the users below 18 would be debarred from playing online real-money games. Further, the know-your-customer verification has been made mandatory for all players at the time of registration on the gaming platform. The authority also mandated that online-gaming platforms would “display pop-up caution messages” if a player played a game for more than an hour, and that such pop-up messages would be displayed to the user every 30 minutes.

 

Such piecemeal regulations, Rathore said, happen largely because of conflation between “gaming and gambling”. While all states have their respective reasons to ban or allow gambling, there is a need to understand online gaming as significantly different from gambling to avoid fragmented rules by states, she said.

 

“As a gaming company, my focus should be innovation in partnership with the government and not fighting one state at a time. We are not capable of that,” Rathore said. 

 

Having to contend with state-specific regulations also had an impact on Winzo’s revenues, she said, adding that last year’s Indian Premier League, which is one of the major traffic drivers to gaming websites, was the “worst time for us (Winzo) in the past eight years”. 

  “We have spent at least 50 per cent of our bandwidth in the last 18–24 months in just dealing with the flux in regulations. Besides all of that, there is the uncertainty of what we should build, whether or not we should raise equity capital. Investors are very cautious in investing in gaming in India, non-real money is hard to monetise, real money gaming is in regulatory flux,” she said.

 

The market of the Indian gaming industry is estimated at $3.7 billion as of 2024, according to industry reports. It is expected to increase at a compound annual rate of nearly 20 per cent to reach $9.1 billion in the next four years.