Real money gaming sector seeks unified regulatory playbook amid scrutiny

Currently, states such as Tamil Nadu, Karnataka, Chhattisgarh, and Maharashtra are at varying stages of enforcing their own rules for the industry

With growing scrutiny from multiple Indian states, the real money gaming (RMG) sector is rolling the dice on a centralised regulatory framework. Industry players say a central law could protect legitimate players while driving out rogue offshore platforms that evade taxes and skirt customer protections.

 

At present, states such as Tamil Nadu, Karnataka, Chhattisgarh, and Maharashtra, among others, are in different stages of enforcing state rules on the industry.

 

Industry bodies argue this patchwork of policies is hurting business and consumers alike, and have called on the Centre to establish nationwide standards for compliance, advertising, KYC norms, and domestic operator whitelisting, among others.

 

“There should be one uniform regulation across states for the RMG sector. If individual states enforce different rules, there will be fragmentation as there will be conflicting compliance requirements across multiple states,” said Roland Landers, chief executive officer (CEO), All India Gaming Federation (AIGF), an industry body for online gaming. 

 

In the digital world, RMG refers to skill-based games such as rummy, poker, or fantasy sports, among others, where players can stake money to compete for cash rewards.

 

The industry is seeking relief through a certification process and whitelisting mechanism to distinguish legitimate companies from offshore entities that pose risks such as tax leakage, money laundering, and inadequate customer protection.

 

“We are asking for a certification process and a whitelisting mechanism to recognise credible companies. A department also should be set up which has representation from not just the industry federations but also from academicians, jurists, mental health experts, and parents and teachers,” said Anuraag Saxena, CEO, E-Gaming Federation (EGF), an industry representation of online gaming companies.

 

He added that such a department under the Ministry of Electronics and Information Technology should involve inter-ministerial engagement from ministries such as the Ministry of Home Affairs, Ministry of Finance, and the Ministry of Information and Broadcasting. 

 

State model

 

The focus on central regulations comes at a time when the Madras High Court upheld Tamil Nadu’s regulations that impose time limits on RMGs such as rummy and poker earlier this month. The state’s regulations prohibit real-money gaming platforms from operating between midnight and 5 a.m.

 

In this southern state, the Tamil Nadu Online Gaming Authority (TNOGA) regulates RMGs, enforcing state regulations on the sector.

 

Earlier this month, the Allahabad High Court directed the Uttar Pradesh government to constitute a committee to examine the need to regulate online gaming and betting in the state.

 

“It is crucial to establish a baseline level playing field for regulations. It will enable uniformity across the sector, while also allowing scope for some modifications at an individual state level,” said Sumanta Dey, vice-president, corporate affairs and public policy at Head Digital Works, the operator of online rummy platform A23 Rummy and poker site A23 Poker.

 

SRBs in focus

 

Landers from AIGF argued that a self-regulatory body (SRB) still holds merit, especially with the Centre empowered to conduct due diligence and appoint a government nominee to such representative bodies.

 

“The idea is that the government should lay down all the due diligence measures, compliance, and responsibilities. The SRB can only work to execute it, with strict oversight continuing to be with the nodal ministry,” he argued.

 

In 2023, the government invited applications for setting up self-regulatory bodies (SRBs), but the proposals were rejected on grounds of being overly dominated by major sectoral players.