Game over for India’s booming online gaming Industry?
A wave of laws, rules in several states threatens to kill large parts of India’s rapidly growing online gaming industry.
Nikita Luther is India’s top poker player, the first woman and second player from the country to win a bracelet at the World Series of Poker, the game’s top competition. Yet at 30, her career stands at a crossroads. Luther’s skills are not in doubt, but the future of poker in India is.
A wave of laws and regulations introduced by multiple states across the country recently threatens to kill large parts of a rapidly growing online gaming industry, including popular card games like poker and rummy. The argument of each of the state governments is essentially the same: The laws passed by Tamil Nadu, Karnataka and Andhra Pradesh and a regulation introduced by Kerala are aimed at stamping out gambling.
But experts warn that the laws are drafted in a manner that does not distinguish between games driven by talent honed over years and those whose outcome is largely determined by luck. That distinction is critical – while betting on “games of chance” is illegal nationally, the nation’s top courts have previously allowed it for “games of skill”.
Now the courts have been called upon to intervene again. The All India Gaming Federation (AIGF), the apex industry body for the sector, and some of the country’s major gaming platforms have challenged the laws passed by Tamil Nadu and Karnataka. The Madras High Court, Tamil Nadu’s top court, struck the law down, while the Karnataka High Court is yet to pass a verdict. But Tamil Nadu has approached India’s Supreme Court seeking a reaffirmation of its law.
“If these laws are allowed to stand, it could cripple the gaming sector in India,” Jay Sayta, a lawyer and gaming industry analyst, told Al Jazeera.
At stake is the future of an industry that, if allowed to grow, is expected to employ 40,000 people in India by 2023, according to the AIGF.
The pandemic has, unsurprisingly, turbocharged the expansion of the sector, with revenues from online skill-based gaming in India expected to double to $3bn by 2023. Last June, consulting firm KPMG described India as among the world’s fastest-growing gaming markets, pointing to the country’s 420 million casual online gamers – second only to China – as evidence of the potential for further expansion.
At a time when Beijing is also clamping down on the gaming industry, a hit in India too could have serious implications for the sector globally. International platforms like PokerStars have invested in attracting India’s vast audience, signing on celebrities like former Indian cricket captain Mahendra Singh Dhoni as brand ambassadors. And the country is in turn producing champions like Luther.
More than a ‘game of chance’
A math nerd, Luther prepares meticulously for every championship: hours of watching training videos, plotting new strategies and studying the game. Then there’s the physical side of poker.
“People don’t realize it but playing a poker championship needs a tonne of stamina,” she told Al Jazeera. “You’re playing 16 hours straight, with just five-minute breaks in between.”
Luther relies on yoga, meditation, a bit of cardio and a carefully controlled diet to get her fit and ready for games.
If her routine sounds rigorous, that would be because poker is anything but easy at the highest levels, where it involves advanced game theory and statistics. Poker theory is offered as a course at the Massachusetts Institute of Technology’s Sloan School of Management. At the Indian Institute of Management in Kozhikode, one of the country’s top B-schools, poker is used to teach competitive strategy.
“Do you think these top institutes would be teaching poker if it were a game of chance that was about gambling?” asked Luther.
To be sure, governments have cause for concern about gambling, though most instances pertain to rummy, not poker. In September, police in Andhra Pradesh arrested a man who had stolen gold worth more than $300,000 from a bank to finance his online rummy addiction. Tamil Nadu has witnessed a series of suicides by people who had lost tens of thousands of dollars in online rummy.
But the solution isn’t a blanket ban on gaming, said Roland Landers, CEO of the AIGF.
“We strongly believe that the way forward is effective regulation or self-regulation, not prohibition,” he told Al Jazeera.
At the moment, the state laws blur the lines not only between games of skills and chance but between different kinds of financial incentives, said Sayta. In fact, all financial stakes – whether aimed at rewarding the winner of a game, or a betting syndicate – are treated the same in these laws. “If two people playing any game take bets on who among them is going to win, that too could be seen as a crime,” Sayta said. “And that’s absurd. The state has no business intervening in the private affairs of people.”
The Madras High Court concluded that the Tamil Nadu law in effect banned even prize money in sports tournaments, and decided that it was unconstitutional. But how the Supreme Court views the state government’s appeal against the high court verdict could have ripple effects across the country. If the top court decides the law is fine, it could pave the way for other states to introduce similar legislation, said Sayta. “That would be the end of gaming in India,” he said.
But conversely, if the Supreme Court upholds the Madras High Court judgment, that could clear the air for the future of gaming in India, said Landers.
What India needs, said Sayta, are sharply defined regulations for the sector – a cap on how much a person can spend at one go on a game, for instance. “The concerns over gambling are legitimate,” he said. “But a heavy-handed response is not the answer.”
Luther is convinced the laws targeting gaming reflect a “resistance to change” among policymakers. Poker is not being played in dark, dingy and dubious clubs. On the contrary, the biggest name in Indian poker has had hedge fund managers, founders and entrepreneurs reach out to her for tips on how to play and improve their game.
“They have weekend games in corporate bonding sessions,” Luther said. “Poker has really taken off – and I would like to believe it isn’t going anywhere.”