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Regulate or ban? MP Sushil Modi demands ‘regulation’ of India’s online gaming industry

Sushil Kumar Modi, member of the Rajya Sabha, is calling on the government to regulate as well as impose a uniform tax on India’s online gaming space. Read more here about the story in detail.

Ankit Kanaujia
Last updated: 16.05.2023
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Sushil Kumar Modi, member of the Rajya Sabha, is calling—nay, demanding—the government to regulate as well impose a uniform tax on India’s online gaming space, which he claims is becoming “potentially problematic” among underage players.

Gaming ‘very difficult’ to control among young players: Modi

During the recent Zero Hour, in which Members of Parliament (MPs) can raise urgent important public issues, Modi told the parliament about the need for the government to regulate the domestic online gaming industry—which he described as “becoming a big addiction.”

“Online gaming is becoming a big addiction. I would like to highlight that this sector, like the crypto industry, certainly has regulatory lacunae,” Modi said, according to local media reports. “I would urge the government to bring a uniform tax on online gaming and I urge the government to make a comprehensive framework of regulation for online gaming.”

In particular, Modi highlighted how it could potentially become problematic among players who might get addicted to mobile games, especially given the growing popularity of online gambling and sports betting coupled with how easy cricket betting app download has become. At the moment, the MP claimed young players in India “have become addicted to online gaming,” and given its online nature, gaming is “very difficult” to control among underaged players.

Government estimates that there are 760 million internet users in the country, more than half of these users play online games at this point. And those estimated 365 million online players get in touch with their games via mobile phones—making India the second-largest mobile gaming market.

Regulation is much safer approach to banning

Given the government’s track record into the so-called regulation of India’s thriving online gaming sector, it’s highly likely that Modi’s demand will pave the way to yet another attempt to roll out a blanket ban on the sector—which, again, will only result in the high courts to step in and overturn the prohibition.

Modi’s narrative echoed that of Karnataka's state officials, which has defended their statewide ban as a way to wean people away from the “vices” of gambling. And blanket bans, history has shown, has proven not to work.

Take a look at Sweden, a mature market when it comes to online gambling regulations, for example. There was a marked growth in unlicensed casino operations after the European country’s gaming authority executed too many limits on licensed operations. As noted by an ENV Media research on offshore gambling licenses and regulated markets: “While these limitations have been reasonable restrictions on bonuses, deposits, and loss limits (per week) in light of Covid-affected consumption patterns, some players have not appreciated tracking methods… Gaming operators that avoid them have begun gaining user bases, offering an easier gambling experience although operating illegally.”

There are lessons that India can learn from these mature markets and apply towards the regulatory framework that Modi is demanding. In particular, authorities must not only mandate operators to pay state taxes and abide local laws; operators must also be able to self-regulate and enforce safety nets that will allow them to practice responsible gaming—which will ensure that minors are protected via restrictions and awareness programs.

“The goal of growing yet unregulated markets should be to achieve high consumer and public interest protection levels through modern legislation. Local jurisdiction licensing and legal channeling has proven as the most efficient means of achieving such ambitious long-term benefits,” ENV Media analysts concluded.

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