Skill Gaming in India

The changing landscape - July 2018

This document is a report collated based on desktop research and is not a survey.

The Games Industry is undergoing dramatic changes. As the industry transitions from being limited to a friends and family activity to a thriving online activity, participation and engagement in gaming is becoming widely recognised and pursued. Growth in the country’s gaming industry is being fuelled by enhanced connectivity, changing needs in social interaction and a growing youth population base. The universal appeal and social nature of the gaming industry offers a multitude of opportunities for direct monetization, user engagement and brand promotions.

Understanding the Regulatory Landscape

Overview of Betting and Gaming

Skill gaming is different from prohibited gambling or gaming on games of chance which is understood to be gambling in nature. The expression “gaming” found in all the State gambling laws has been interpreted by the Supreme Court in the case of Dr. K.R. Lakshmanan v. State of Tamil Nadu and Anr., (1996) 2 SCC 226.

  • Statutory Provisions in India – Overview: The PGA criminalises the act of gambling in a public forum in India and the keeping of a ‘common gaming house’. Common gaming-house is defined as any house, walled enclosure, room or place in which cards, dice, tables or other instruments of gaming are kept or used for the profit or gain of the person owning, occupying, using or keeping such house, enclosure, room or place, whether by way of charge for the use of the instruments of gaming, or of the house, enclosure, room or place or otherwise howsoever.
  • Skill Gaming – Regulatory Insights: The differential treatment accorded to games of skill and games of chance, with the former permitted and the latter prohibited, has been a historic feature of Indian law. Section 12 of the Public Gambling Act exempts games of skill from the penal provisions against gambling – ‘Nothing in the foregoing provisions of this Act contained shall be held to apply to any game of mere skill wherever played’.
  • Gaming in India: Gaming has a universal recreational appeal for people across all ages and socioeconomic groups. The gaming industry has witnessed a paradigm shift with the evolution of television, digital and online gaming models leading to a surge in the number of online gaming sites over the last few years. Given the high growth potential of the gaming industry in India, many foreign entities are exploring possibilities to set up operations here. While operating gaming businesses is easier in some countries of the world where games of chance and games of skill are regulated, the business environment is not as conducive in India since the laws are stringent. 
  • Understanding the SkillGaming Industry in India: Majority of the Operators in skill gaming industry are corporate entities registered in India as a Private Limited Company.
  • Corporate Structure: The gaming industry in India is divided into two segments, i.e. the offline gaming industry (gaming clubs, casinos) and the online gaming industry (gaming websites). 
  • Growing Trends: The last few years have led to a remarkable growth in the revenue figures of this industry. The calculated CAGR for the last 3 years for card based games on the basis of change in revenue is 67.58 percent generating a total revenue of about 730 crores in 2016-17 and Fantasy Sports has grown by 199.69 percent generating a total revenue of about 67 crores in 2016-17.
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