Niti Aayog to rethink online gaming policy for operating standards across India
CHENNAI: NITI Aayog, a central government thinktank, has released a draft paper for discussion on the topic: "Guiding principles for the uniform national-level regulation of online fantasy sports platforms in India".
The online sports fantasy industry in the country, according to a market report that the paper has cited, "has the potential to attract Foreign Direct Investment of more than INR 10000 crore over the next few years as well as generate 1.5 billion online transactions by 2023". It also mentions that the number of fantasy game users in India has grown "at a compounded annual growth rate (CAGR of 212% from 2 million users in June 2016 to 90 million users in December 2019)."
Further, the paper also cites a Pricewaterhouse Coopers India report which noted that "fantasy sports industry has the potential to generate an additional 5000+ direct and 7000+ indirect jobs in the next 2-3 years. It also estimates that the fantasy sports industry has the potential to contribute GST revenue of INR 3000 crore to INR 3500 crore over the next five years, with income tax on winnings and corporate tax paid by OFSP (Online Fantasy Sports Platforms) operators expected to contribute between INR 7000 crores and INR 10000 crore over the next five years".
Interestingly, because online gaming is a state subject, what's legal in one part of the country, may not be legal in another part. So, the paper hints at wanting to bring in uniformity in terms of operating standards. "With the absence of regulation and lack of policy clarity, there is an imperative need for uniform operating standards, based on sound principles and best global practices, and the monitoring of adherence to these principles and practices to protect fantasy sports users’ interests," the paper states.
They go further to suggest an independent and cost-effective redressal mechanism must be considered for meeting the "the twin objectives of (i) providing accessible and uniform dispute resolution to consumers and (ii) not repeatedly exposing compliant OFSP operators to repeated legality challenges that come from consumer disputes reaching the courts".
It also bats for independent recognition of the industry so as to enable the industry to focus on innovation. "Thus far, certain formats of fantasy sports formats have received judicial recognition in various High Courts and with the Hon’ble Supreme Court of India also having endorsed certain of these judgments. However, fantasy sports contests do not have independent legal recognition, having to shelter under an undefined exception to the state gambling and public order laws. Formal recognition of the fantasy sports industry and providing for principle-led governance would enable Indian OFSP operators to focus on innovation and achieve scale and expand their operations in a clear and principle-based regulatory environment ..."
In the same vein, they also want to secure the industry from fly-by-night operators who market a game with questionable legality. "It is worthwhile to add that with the recognition of fantasy sports as a game of skill, it is equally imperative to secure the industry and the users of OFPSs from unscrupulous operators who lure users with games of questionable legality in the guise of fantasy sports, and thereby tarnish the image and potential of the industry as well as the consumer’s trust and expectation that the outcome of a fantasy sports contest will be determined by the superior exhibition of skill relative to participating users," the paper points out.