ONLINE GAMING

Online gaming involves playing internet-based games that enable players to connect and collaborate, accessible on computers and mobile phones. In contrast, online gambling encompasses participating in internet-based betting activities, aiming to win money or prizes using virtual chips or digital currencies.

TYPES OF ONLINE GAMING

• E-sports: Well organised electronic sports which include professional players).
• Fantasy sports: Choosing real life sports players and winning points based on players’ performance.
• Skill Based: Mental skill.
• Chance Based: Based on random activity (like roll of a dice) online games.

INDIA’S ONLINE GAMING POTENTIAL

• India is one of the largest gaming markets in the world. 
• The Indian gaming industry’s revenue stands at 3.1 billion dollars in the financial year 2023. 
• It is predominantly a home-grown start-up ecosystem growing at 27% CAGR. 
• It is widely estimated that AI and online gaming can add up to $300 billion to India’s GDP by 2026-27. 
• The quantity of gamers in the nation is supposed to expand from 420 million in 2022 to 450 million by 2023, and it hit 500 million by 2025.
• E-sports has been a growing and emerging sub-segment in the country with close to 10-15 million  E-sports viewers in India in FY20 and projected to grow to 130+ million viewers by FY25 .

REASON FOR GROWTH OF ONLINE GAMING IN INDIA

1. Penetration of Smart Phone

• According to the World Economic Forum (WEF), mobile devices are the primary driver of India’s gaming industry. India Currently has some 650 million smartphone users 

2. Affordability and Availability of Internet

• India is a data-rich market with cheaper mobile data as compared to global averages.
•  India being a mobile first gaming market, is expected to benefit immensely from this growing internet penetration.

3. Young Population

• Gaming has a higher adoption amongst the younger population in India with the 18-30 age group highly engaged users of gaming.

4. Adoption of digital payment methods

• Increase in penetration of digital payments instruments driven by demonetisation and the COVID-19 induced lockdown has reduced the friction for digital purchases in-game and has contributed to the rapid growth in online payments on gaming portals

5. COVID-19 pandemic impact

• Due to the restrictions and lockdown imposed by Covid 19, there were online schools and work-from-home and the growing popularity of digital payment contributed to increasing demand for online gaming.

6. Recognition for esports as a standalone sub-segment

• It has also been officially recognised by the Indian Olympic Association by establishing the Esports Federation of India as the leading governing body of Esports in the country.

7. Increasing games with localised content

• Most of the popular games in India like Teen Patti by Octro, Ludo King by Gametion and others provide options to play games in local languages like Hindi, Gujarati, Marathi etc., thus attempting to target a large local audience

8. Growth in investments

• Various global investment firms have made significant investments in the Indian game sector over the past 2-3 years, helping gaming companies achieve operating scale.

BENEFITS OF ONLINE GAMING

1. Convenience

• Compared to traditional gaming methods, online gaming may be accessed from the comfort of one’s home or from any location with an internet connection.

2. Inclusive

• Online gaming makes participating in gaming activities that might otherwise be challenging or impossible for those with disabilities or those who have trouble leaving their homes more accessible.

3. Revenue Generation

• Through taxation and regulation, online gaming has the potential to bring in a sizable sum of money for the Indian government. 
• According to a report by EY and FICCI, transaction-based games revenues grew 26% in India, with the number of paying gamers increasing by 17% from 80 million in 2020 to 95 million in 2021.

4. Employment

• It may open up employment prospects for Indian business owners, who may then construct and manage their own online gaming platforms.

ISSUES WITH ONLINE GAMING

1. Betting and Gambling Controversies

• Traditional games like online ludo, popular in India, have faced disputes and accusations of involving betting and gambling.

2. Unintended or Unauthorized Purchases

• In-game transactions may lead to substantial bills, emphasizing the importance of adjusting device settings and removing credit card information to prevent unauthorized purchases.

3. Exposure to Inappropriate Content

• Online gaming platforms may expose users to problematic content such as violence, sexual material, gender or racial stereotypes, and inappropriate behavior from other players.

4. Cyberbullying and Harassment

• Online gaming chat functions or message boards, often anonymous, can become platforms for cyberbullying and targeted harassment, posing risks to the well-being of users.

5. Behavioral Changes and Addiction

• Excessive playing facilitated by the design of online multiplayer games can lead to habit-forming behavior, raising concerns about addiction and its impact on users' daily lives.

6. Viruses, Malware, and Ransomware

• Hackers may exploit online gaming forums to encourage the download of infected files or visit malicious websites, posing risks of viruses, malware, or ransomware affecting users' devices.

7. Privacy Concerns

• Personal information shared on gaming platforms may be at risk of being accessed by third parties, especially if gaming accounts are linked with other social network platforms, emphasizing the need for privacy safeguards.

8. Offshore Gambling Websites

• Betting on cricket matches through offshore websites like Betway, Bet365, and DafaBet, headquartered in tax havens, raises regulatory challenges and potential risks for Indian users participating in these activities.

ADDRESSING THE CHALLENGES OF ONLINE GAMING

1. Age verification

• One approach is to implement age verification measures to ensure that children and young people are not able to access games that are not suitable for their age.

2. Parental controls

• Another approach is to provide parental controls that allow parents to set limits on the amount of time their children spend playing online games and to restrict access to certain games.

3. Education and awareness

• Raising awareness about the potential risks and challenges of online gaming can help individuals make informed decisions about their gaming habits.

4. Industry self-regulation

• The online gaming industry could adopt self-regulatory measures to address issues such as fraud, cheating, and predatory in-game purchases.

5. Government regulation

• In cases where self-regulation is not effective, governments may need to step in and regulate the industry in order to protect consumers and address challenges such as cybersecurity risks and problematic gaming behavior.

REGULATION OF ONLINE GAMING IN INDIA

1. Seventh Schedule

• Constitution of India empowers State governments to legislate on matters relating to betting and gambling  in the State List of the Seventh Schedule.
• However, the State cannot legislate on games of skill as it is only concerned with betting, gambling and sports, which fall under the ambit of games of chance.

2. Courts on Online Gaming

• According to various Court’s judgement, betting on games of skill is legal, while betting on games of chance is not.
• Playing online games and sports of skills forms part of article 19 (1) (g) and Article 21 of the constitution.
• States only have the power to make laws and regulate gambling, and betting on the activity of gambling.

3. Legal Entity

• Any online gaming platform – domestic or foreign– offering real money online games to Indian users will need to be a legal entity incorporated under Indian law.

4. Reporting Entity

• These platforms will also be treated as reporting entities under the Prevention of Money Laundering Act, of 2002.

5. Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Amendment Rules, 2023

• It is a comprehensive framework for Online Gaming Eco-system.
• The new rules define an online game as a game that is offered on the internet and is accessible by a user through a computer resource or an intermediary
• It requires real money gaming platforms to register with a self-regulatory body (SRB) that will determine whether or not the game is permissible.
• The new rules for online gaming prohibit any game that involves betting and wagering.
• Obligatory for intermediaries to not host, publish or share any online game that can cause harm or hasn’t been verified as permissible.No advertisement or promotion of non-permissible games allowed on their platform. 

GOVERNMENT INITIATIVES TO PROMOTE SAFE ONLINE GAMING IN INDIA

1. Digital Gaming Research Initiative

• The government has started a digital gaming research initiative to support the Indian digital gaming research space and industry. 
• The Science and Engineering Research Board (SERB) of the Department of Science and Technology has identified three main directions for its Digital Gaming Research Initiative:

• R&D in learning and leisure gaming platforms, 
• immersive game prototypes with an emphasis on Indian culture and values.
• Collaborative technical design process, which was made by SERB Game Labs.

2. AVGC Promotion Task Force

• The Ministry of Information and Broadcasting has established the Animation, Visual Effects, Gaming and Comic (AVGC) Promotion Task Force. 
• The government recognizes that the Indian AVGC industry has the ability to carry the Make in India and Brand India banners. 

ONLINE GAMING REGULATION GLOBALLY

1. China

• It has placed strict limits on the time young people may spend playing online games.
• Online gaming in the country is now only available to people younger than 18 from 8 p.m. to 9 p.m. on Fridays, Saturdays, Sundays and public holidays.

2. USA

• In the U.S., Internet casino gaming remains illegal in every state that doesn’t explicitly legalise the games.

3. Germany’s Youth Protection laws

• It aimed at violent games pushed developers to replace realistic red blood with a green version.

4. Australia

• It has sought to ban games for including depictions of everything from assault to marijuana use.