The Regulation of Online Gaming in India

APCO alumnus Adip Puri co-authored this piece.

Online gaming in India has grown steadily over the past decade, helping the fast-growing industry expand its footprints into the deepest nooks and crannies of the semi-urban and rural areas of our vast country thanks to a rising penetration of the internet and smartphones.

A national lockdown triggered by the COVID-19 pandemic and increasing work-from-home practices have seen an increasing number of people spending more time online seeking new forms of entertainment, whether it is to consume music and entertainment on OTT platforms or to play online games, giving a new fillip to the segment. The online gaming industry in India exhibits huge potential.

With a compound annual growth rate of over 40% in India, it is a valuable source of revenue generation as well as a creator of highly skilled jobs in areas such as graphic design, coding, marketing, management, and ancillary sectors.

Given its large pool of enthusiasts and increasing availability of digital infrastructure and engineering talent, India is well poised to give a huge push to this industry and turn it into a growth engine to fire both money and jobs just as the first wave of massive growth that the software sector witnessed.

India today is home to more than 400 gaming start-ups, many of them already unicorns. We are also fast becoming a key backend development centre for gaming companies, giving us an opportunity to spawn a second software revolution.

However, there are critical festering issues that could be detrimental to the industry’s growth. For one, state governments are struggling to understand and appreciate the difference between Games of Skills and Games of Chance, succumbing to populism to control and ban this sunrise industry.

At heart are outdated laws and social norms which help perpetuate an archaic narrative propounding that online games are addictive and lead to financial loss. This takes away the consumer’s right to learning and entertainment. A more modern and robust regulatory framework would, therefore, be in everybody’s interest as that would allow a structured growth of this sunrise industry which has a huge untapped potential.

APCO Worldwide is extremely pleased to present this overview of the online gaming industry in India. It is, as we report, a rapidly changing business with high demand from consumers which is only likely to grow. It is being watched closely by users, developers, financiers, regulators and technocrats alike.