The iGaming Addiction – a Social Catastrophe in the Making?

Online gaming has witnessed rapid growth worldwide in the last several years on the back of increased penetration of smartphones, faster internet speeds, and the real-time gaming experience. Likewise, the Indian gaming industry is no different, having taken a giant leap over the years. This growth brought along a wave of iGaming, which refers to any form of online casino gaming and the software used to support these forms of gambling. Simply put, iGaming means online betting and gambling. With an adequately conducive tech environment paired with the impact of celebrity endorsements, iGaming has begun to take a firm grip on its users.

Recent statistics show that around 40% of Indian adults have placed bets at least once on online platforms. Experts project that by the end of 2023, the Indian cricket betting business alone will be worth over $2 billion. The pandemic gave a strong shot-in-the-arm to this market in India and as a result, the market clocked a 40% growth and people are now more willing to ‘pay to play’ – another euphemistic expression for gambling. With 120 million paid gamers, India added nearly 2 million new paying users to the ecosystem every month in just FY22.

Another important factor helping this market swell even further is celebrity endorsements and glamorous rewards. Prominent personalities from Sports and Bollywood are endorsing such online betting apps, perhaps deliberately being oblivious to their social responsibility of how their fans are being impacted. Dream11 has been endorsed by many celebs, such as MS Dhoni, Aamir Khan, Rohit Sharma; My11Circle by Ranvir Singh, Shubman Gill, and Sourav Ganguly – even during his tenure as BCCI president; Virat Kohli has been an investor and promoter of ‘Mobile Premiere League’ (MPL); MS Dhoni has promoted PokerStars, while Shahid Kapoor is promoting PokerBaazi.

The proliferation of these ‘chance-based’ online games are making people addicted, anxious, aggressive, and irrational. There have been multiple incidents of violence, with some even committing suicide succumbing under the pressures of money lost on such apps. Further, such unprecedented growth has led to several cases of money laundering by the companies operating such apps – for most of them operate as offshore registered online gaming companies.

These apps and their operating companies thrive on the existing regulatory loopholes in the system. There are no Federal regulations governing online gaming as these are state level affairs. Online gaming has always been regulated by the state, but state governments find it tough to enforce rules like geo-blocking certain apps or websites within their borders. Most states allow skill-based games, but some don’t allow games of chance, which are considered gambling and immoral.

Regulations pertaining to online betting are still a ‘grey area’ in India. Although gambling is regulated in the country by the Public Gambling Act of 1867, the law was passed in the pre-internet era with no mention of online gambling. The Information Technology Act of 2000, which regulates online activities, also does not cover online gambling and betting in its purview. As such, online gaming and betting are classified as neither legal nor illegal. This allows users to freely place their bets with offshore casinos and bookies as well as on these online betting apps.

The existing lose regulatory framework is not robust enough to even deter celebrity commendations. For instance, despite the Madurai Bench of the Madras High Court issuing notices to Sourav Ganguly, Virat Kohli, and others for endorsing apps involving financial transactions, the endorsements have only seen an uptick.

However, the government is now taking concrete and measurable actions to regulate this industry. In April-2023, the central government released new guidelines to regulate online gaming which prohibits real money games involving wagering or betting. The government has also opted for a self-regulation model for the online gaming sector and will make three self-regulatory organisations (SROs) which will approve games that can operate in the country. According to the new rules, the online gaming self-regulatory body may declare an online real money game as permissible, if “the online real money game does not involve wagering on any outcome”.

Despite the effort of the central and state governments, the regulatory trickledown impact is low and slow. Increasingly, people are stepping into the world of online gaming and betting, encouraged by the constant reinforcement of celeb endorsements. The lure of easy money adds to the ‘mirage’ effect and will soon snowball into a social catastrophe. A strong legal and regulatory framework, responsible behaviour from our celebs, and the general public’s ability to discern a potential trap are all necessary ingredients of making online gaming what it is meant to be – a fun experience, and not a harbinger of pain and loss.

Author: Sanprati Sharma

Assistant Consultant, Strategy Consulting