Indian group calls for cap on online gambling entry fees amid regulatory pressure

The Dream11 and MPL logos are displayed in front of the Indian flag in this illustration taken September 14, 2022. REUTERS/Dado Ruvic/Illustration/File Photo

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  • The group will push for a Rs 50 cap on paid online games
  • Indian panel works on regulation of booming industry
  • This decision could affect the revenue and growth potential of source platforms
  • Industry plans to lobby against regulation – sources

NEW DELHI, Sept 20 (Reuters) – An influential Indian nationalist group will push to limit entry fees for paying online game players, which could put pressure on a multi-billion dollar industry preparing to lobby against stricter rules.

The growing popularity of real-money gambling, spurred by endorsements from cricket personalities, a sub-continental craze, has prompted regulatory efforts to tackle the risk of addiction and reports of financial loss and suicides among young people.

These games could represent up to 53% of a gaming market that is expected to reach $7 billion by 2026, three times its size last year, according to research firm Redseer.

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“The size of the ticket should be regulated. It should not exceed 50 rupees. It is an addiction,” said Ashwani Mahajan, an official at Swadeshi Jagran Manch, which is considered to have significant influence on policy-making. Indian.

“We will talk to all relevant ministries about it,” he told Reuters.

Although equivalent to just 62 US cents, the proposed cap is a significant chunk of the 25 rupees or 31 cents typically spent by 97% of users on an app such as Mobile Premier League, for example.

The remaining small share of 3% of users contribute 30% of the platform’s revenue by playing larger games, an industry source estimated.

Tuesday’s comments from the group, the economic wing of the ruling party’s ideological parent Bharatiya Janata (BJP), come after a government panel called for a new regulator and recommended deposit and withdrawal limits. Read more

The measures, in a confidential draft reported last week by Reuters, have alarmed an industry in which Tiger Global and Sequoia Capital have invested in fantasy sports game providers such as Dream11, MPL and Games24X7 which offer cricket and other paid contests.

Dream11 commands an $8 billion valuation, while MPL and Games24X7 are valued at around $2.5 billion each, according to data from PitchBook.

Although the panel report did not set any fee cap, four high-level gaming industry sources who spoke on condition of anonymity said such a move would affect revenue and growth potential. platforms.

They pledged to bring their concerns to the government.

India’s information technology ministry, which set up the government panel, and some senior officials from ministries such as revenue and sports listed on it, did not immediately respond to a request for comment.

MPL declined to comment. The other two companies did not immediately respond to requests for comment.

Sameer Barde, chief executive of the E-Gaming Federation, a grouping that represents MPL and Games 24X7, said companies “cannot really operate” with a uniform restriction on deposits and called such limits “unfair”. for gamers.

The new federal rules aim to resolve industry complaints about “inconsistent” Indian state regulations, divergent court rulings on games governed by skill or chance and addiction issues, the panel’s draft showed. Read more

Another concern for the industry is a government plan for a regulator to assess whether a game is skill-based or chance-based.

Such federal scrutiny, according to two sources, is expected to have a greater impact on the Sequoia Capital-backed MPL, as it offers around 70 real-money games, while Dream11 only offers seven fantasy sports games, including cricket and football. soccer.

“Most of the mature industry is quite clear that regulation will only help,” Barde said.

“But the concern is that if it takes an inordinately long time for approvals to come in, you could become useless in the market by then.”

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Reporting by Aditya Kalra in New Delhi and Abhirup Roy in Mumbai; Editing by Clarence Fernandez

Our standards: The Thomson Reuters Trust Principles.


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Carolyn M. Daniel