“Major problem with Indian rule-making (executive/judiciary/legislation) is making everything either banned or mandatory. Regulating something with clear, reasonable limits does not seem like an option-same with alcohol, fire crackers etc. Either prohibition or theka at every corner “, tweeted by Sanjeev Sanyal, former Principal Economic Advisor and permanent member of the PM-Economic Advisory Council.
Major problem with Indian rule-making (executive/judiciary/legislation) is making everything either banned or mandatory. Regulating something with clear, reasonable limits does not seem an option – same with alcohol, fire crackers etc. Either prohibition or theka at every corner
— Sanjeev Sanyal (@sanjeevsanyal) October 24, 2022
“This maximalist approach derives from single-issue grandstanding. In contrast, all successful societies are the result to complex and changing trade-offs, “he added.
Sanyal is well known among the deep thinkers of regulatory frameworks and has written various books and articles on the same. And he raised a very important point here-that the default mind-set of the Indian governance architecture is to either completely ban something or not regulate it at all.
Also read: As predicted by TFI, the government is all set to impose 28% GST on online gaming
Online gaming – Online gambling
Things like light-touch regulation, techno-legal regulation, and smart monitoring, which are evolving frameworks of regulation in an increasingly complex ecosystem where the boundaries between different disciplines have blurred, are far from the understanding of the majority of Indian politicians, bureaucrats, and most importantly, courts.
Various evolving fields like online gaming and Block chain technology are receiving maximalist intervention from the government as well as other regulatory bodies like RBI.
Most recently, the Tamil Nadu government promulgated an Ordinance on October 3rd banning “online gambling and online games of chance” amid the rising cases of gambling-related suicides in the state. The ban on online games like Rummy and Poker was due to 17 suicides in the state in the last 3 years.
The step by the TN government is like banning automobiles due to a few accidents or banning alcohol consumption due to alcoholism among some people (as Nitish Kumar did). In these cases, the entire population is getting punished for the mistakes or crimes of a few individuals. A better step in these situations would have been to build roads and regulate traffic and to improve the state’s capacity to regulate alcohol sales, but the government in Bihar decided to ban the same.
Also read: Online gaming is an idea whose time came long back, it just needs government regulations
Regulation rather than ban
This extreme step seems like an easy way out for the government because to regulate means to increase state capacity, which would, put more burden and responsibility on the government. For governments with weak state capacity, it is easy to kill a sector altogether or make it a source of black money (through selling in black money) for politicians and bureaucrats instead of increasing state capacity to regulate.
The incentives here are misaligned, especially for bureaucrats who are responsible for regulating sectors on behalf of the government. While keeping things legal means more tax revenues, more formal employment, and thus more money for entrepreneurs and citizens, banning them means more kickbacks to bureaucrats, because even when banned, these activities keep going in the black market with some part of the profit going to regulators.
The ban on online games, on account of them being addictive, debt traps, psychological issues, and data privacy issues, is not going to end the markets for the same but will create a huge black market on the internet, as has already happened in Telangana. The state banned online games in 2017, but there has been a surge in illegal and underground gambling apps, mostly from China and other foreign countries.
Also read: Why Online Gaming Is Becoming the New Growth Driver
Game of skill vs. Game of chance
One after another, many states have banned online games, calling them gambling. Incidentally, the court took a different view on this and called them games of skill, not chance. Rummy, as laid down by the Supreme Court, is a game of skill and therefore shouldn’t be banned. Gambling is a game of chance and thus banned.
Online gaming is emerging as a huge market in India. People with a lot of free time to kill are leaning towards online gaming as a time-pass option. Currently, China is the world’s biggest video gaming market, with an estimated 720 million gamers that generated revenues worth $44 billion in the year 2020. Indian online gaming, on the other hand, is currently growing at a compound annual growth rate of nearly 20 percent and could turn out to be one of the major contributors to the Indian government’s target of taking the digital economy to more than $1 trillion in 2025.
Also read: Finally, India is getting its share of recognition in the International Gaming Sphere
Indigenisation of gaming industry
As China is receding from the international gaming market, game developers from all over the world are looking towards India to replace China. This presents a much-needed opportunity for developers to explore India’s rich history. Indian gamers will feel more connected to the protagonists based on Indian history. Recently, ‘Raji-an ancient epic’ developed by Pune-based Nodding Heads Games was a similar attempt in the direction of indigenising the gaming industry. The well-choreographed rise of the Indian gaming industry will function as India’s cultural ambassador to the world.
The government needs to streamline its policies regarding gaming in India. Various Supreme Court judgments have done well to provide some clarity regarding the definition of online gaming in India. But, since gaming is a subject that is overseen by the state governments, a lot of ambiguities are still lurking. India should align its policies with internationally accepted taxation on the gaming industry and allow it to fulfil its potential.
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