Indian gambling companies want to be categorised as Esports and Gaming

A consortium of Indian gambling companies have met with government officials to discuss the possibility of categorising them as esports and gaming businesses, sources tell IGN India.

The meeting happened late last month, and while no decision has been taken, the ramifications of such a move would be immense for the gaming industry.

To club video games and esports with gambling would be detrimental to the development of the Indian games industry across all spheres. Reason being, gambling is looked down upon in India. Particularly with gambling-related deaths across the country due to addiction in recent years.

This isn’t exactly a new development. Gambling companies have been trying for years to charm the public into legitimising them. India has a history of looking down on gambling, and gambling companies have been trying to relabel themselves as 'real-money gaming', going as far as taking out full page ads on newspapers to curry-favour public opinion.

“But don't go out there pretending that's not exactly what it is.”

The Indian gaming community, however, is having none of it.

“If you removed the money/prize-money out of Counter-Strike, League of Legends, Apex, Dota, whatever your poison maybe, people will still be out there playing these same games tomorrow,” said one Redditor.

“You take the money out of online poker/rummy or whatever, and I'd like to see how many of these folks would be out there putting out ads for Zynga poker on Facebook,” the post continues. “The f*ing gambling lobby has the gall to rebrand itself ‘online skill gaming’ and pretend it's such a great boon the state is passing up on...GAMBLING, that's what this is an ad for. Not video games, not analog/digital game development (for anyone curious, check out boardgamegeek.com and how absolutely huge and magnificent the hobby gaming sector really is), this is an ad to allow the state to let people bet money on sports or cards. ‘Skill gaming’ my ass...I have no qualms for anyone who wants to support online gambling. You do you. But don't go out there pretending that's not exactly what it is.”

And while this is a recent development, it isn’t the first attempt. From 2018, these companies sponsored video game events like the Indian Game Developers Conference in an attempt to be perceived as similar to video games. At the same time, thanks to an influx of venture capitalist funding, certain Indian game companies have pivoted to gambling, developing teen patti and rummy-styled games that promise cash prizes.

“Sure, it’s been a beneficial situation. But so is porn. So where do we draw the line?”

Publicly though, IGDC Convenor Rajesh Rao has defended such companies, claiming them to be making ‘games as skill’. This argument, of course, completely side-steps the human cost of such activities.

Internally, several IGDC members speaking to IGN India on condition of anonymity are at odds with this position. “Sure, it’s been a beneficial situation,” says one game developer. “But so is porn. So where do we draw the line?”

For what it’s worth IGN India reached out to IGDC for comment prior to publishing and has received no response.

It will be interesting to see how this situation develops. Compared to previous years, venture capitalists that have funded gambling companies in India have been more cautious of late.

“The end goal of these apps are to be on the Play and App Store.”

“The unit economics doesn’t work out,” says one general partner for a large Indian venture capitalist fund on condition of anonymity. “The end goal of these apps are to be on the Play and App Store. All of this is to reach that end. But it’s being a lot more expensive to get there than we anticipated.”

It’s not just fund managers. Indian game executives have spoke out against such developments due to the adverse impact it could have on the video games and esports businesses.

“[W]e believe real-money gaming in India is a regulatory black-hole,” said ESL India and Nodwin boss Akshat Rathee in an interview with Indian tech site Techquila late last year. “Gambling even more so. We believe esport does not deserve any gambling. We are not skill-based gaming, we are a sport. We are a sport because the physicality of responses of our participants leads to the result of a winner.”

It’s bold of Rathee to assume such a stance, particularly when Nodwin’s parent company Nazara has forayed into gambling as well.

“Comparing our esports athletes with people playing fantasy sports or rummy is where the problem germinates.”

Some, like Vishal Gondal, have gone a step further in calling current laws into question.

“In India, the current legal position of online gambling is based on archaic laws that will need to be modernised as soon as possible,” Gondal wrote on policy site Medianama. “The Public Gambling Act, 1867, prohibits the operation of and visit to gambling houses; but exempts the application of the sections to ‘any games of mere skill’. Most of this legislation was enacted prior to the advent of virtual or online gambling and therefore primarily refers to gambling activities taking place in physical premises. It is not a settled position of law as to whether these prohibitions extend to the online medium. However, it is clear that online gambling is fraught with the same issues that exist in offline gambling sites.”

“This unsettled position has led to the law around online gambling in India to be unclear and grey. Roulette, blackjack, poker, bingo, sports betting, fantasy sport betting, lotteries, rummy – all have piecemeal regulation through state legislations. However, these measures have not been elaborate enough to ensure online gambling is run ethically and legally.”

“Esports is different from gambling.”

Some industry stakeholders feel the government needs to do more for the growth of gaming and esports according to Esports Federation of India Director Lokesh Suji in a recent Indian Express interview.

“This itself hampers the growth of esports in our country in a significant manner, as players don’t get the benefits of sports quota like other sports,” he said. “Comparing our Esports athletes with people playing fantasy sports or rummy is where the problem germinates.”

That said, it appears that the Indian government appears to be cognisant of the difference between gambling and esports.

“Esports is different from gaming or igaming and gambling, etc. as former is skill-based while latter are chance based,” said Kiren Rijiju Indian Minister of State For Youth Affairs and Sports in a recent Parliament session.

The article was first published on IGN India