I. Overview
1. The Indian Government recognizes online gaming segment as having the potential to make significant contributions to the Indian economy through FDI investments, employment opportunities and revenue generation for the government. Recent industry report estimated that the Indian gaming community comprises ~425mn gamers in FY 2023 with a y-o-y growth @ 4-5%.1 This segment has cumulatively attracted investments close to USD 1.9 mn between FY20- FY23. According to another industry report,2 this segment is expected to reach USD 4.6 bn by 2025 at a Compound Annual Growth Rate of 21%. With increasing acceleration in internet access in India, as well as ~548mn smartphone users, approximately~430 mn unique downloads of gaming apps took place in in FY23.
2. Till now, real money gaming (RMG) sub segment is dominant with a market share of 82.8% in FY23. Indian developers and publishers have thus, till now, focused on the RMG segment. Even the Statutes, Regulations and Policy initiatives have, till now, revolved around addressing the concerns of the RMG segment. The Government as well as the enforcement machinery (through the Judiciary and Law Enforcement Agencies) has focused on curbing illegal betting / gambling so as to protect and promote legal RMG online games.
3. Four major lobby groups represent the majority online gaming companies in India - the Internet and Mobile Association of India (IAMAI), the Federation of Indian Fantasy Sports (FIFS), the E-Gaming Federation (EGF) and the All India Gaming Federation (AIGF). As has been the theme, their focus has also, till now, revolved around lobbying for legitimizing RMG games of skill and to shed the baggage of illegal betting / gambling for such games. Their voluntary code of ethics has become the industry standard in protecting consumer interest and creating a healthy online gaming environment in India.
4. However, identifying the immense potential of non-RMG games, the Indian Government in its recent Consultation Paper has sought industry views on promoting Indian developers and publishers. The Government recognizes that popular online games are all developed in foreign countries as Indian developers lack the expertise and the wherewithal to market, distribute and manage their gaming communities in the absence of support from independent publishers. The discussion around promoting Indian developers and independent publishers has thus commenced in India. The focus is slowly shifting from the debate on illegal gambling / betting versus legal RMG games, to means and ways to tap into the revenue potential of the online gaming industry
Footnotes
1 Ernst and Young, Navigating the evolving landscape for online gaming in India, (December 2023), available at download
2 FICCI and Ernst and Young, #Reinvent: India's Media and Entertainment Sector is Innovating for the Future, (March 2024) [116], available at download
Originally published in LawPickle
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