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Source: The post issues with online gaming in India has been created, based on the article “Regulating India’s online gaming industry” published in “The Hindu” on 15th January 2024.
UPSC Syllabus Topic: GS paper2 – polity – Government policies and interventions for development in various sectors and issues arising out of their design and implementation.
What is the current state of online services in India?
Internet Usage: India has the world’s second-largest internet user base with 692 million users.
Mobile App Engagement: The average daily mobile app usage is at 4.9 hours, a 32% increase since 2019.
Media and Entertainment Dominance: Around 82% of app usage is for media and entertainment, with social media being a major part.
Online Gaming: The online gaming industry is booming, growing at 27% CAGR, with potential risks like addiction and financial frauds.
What are the issues with online gaming in India?
Concerns of Addiction and Mental Health: The rise in online gaming has brought issues like addiction, mental illness, and even suicides.
Financial Frauds and Risks: Players are exposed to financial frauds, especially due to the lack of distinction between legal gaming platforms and illegal gambling/betting sites.
Illegal Offshore Gambling Markets: The illegal offshore gambling market in India receives about $100 billion per year from Indian deposits and has grown 20% in the past three years.
Losses to the Exchequer: Due to these illegal operations, India loses approximately $45 billion annually in potential taxation.
National Security and Money Laundering: The sector has been linked to national security concerns and money laundering, as highlighted by the Parliamentary Standing Committee on Finance.
How is the government responding?
Response in India:
Proposing New Regulations: The Indian government is working on new forms of digital regulation to address online gaming issues.
Information Technology Rules, 2021: This initiative is a significant step towards digital oversight, although the implementation of Self-Regulatory Bodies has been delayed.
Challenges with State Bans: Some states attempted to ban online gaming, but enforcing these bans is difficult due to the Internet’s cross-border nature.
For more information read articles1, articles 2
Global Response (Example of the UK):
Centralized Government Regulator: The UK employs a centralized government regulator to oversee the gaming sector. This regulator publishes quarterly reports on the effectiveness of gaming regulation, showing significant fines imposed for non-compliance and a reduction in disordered gaming behavior.
Way forward
To move forward, India needs to implement strict regulatory frameworks for online gaming, inspired by models like the UK’s centralized regulator. Specialized authorities should be established to distinguish legal from illegal gaming platforms, addressing issues of addiction, financial fraud, and national security. This approach will safeguard the 373 million Indian gamers and combat annual tax losses due to illegal gambling.
Question for practice:
Discuss the current state of the online gaming industry in India and the issues it faces, along with the government’s response and potential ways forward.
