India’s online gaming ban: Why take such a big legislative gamble?

A policy that prohibits such an activity runs the risk of sending it underground or overseas, making it much harder to monitor. Which, in turn, could spell even more grievous consequences. Yet, this does not mean that the Wild West air around India’s online gaming industry should continue.  Lawmakers could have intervened with a framework that includes strict age-gating rules, heavy ‘sin’ taxation and exemplary punishment for any violation.

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The Centre argues that platforms that run money games pose a potential threat to national and economic security, with digital wallets and crypto acting as avenues for money laundering and illicit transfers, even as they let data leak with little regard for personal data protection. Apart, of course, from the danger of offshore entities dodging taxes. There is also the harsh reality of addiction among the underage, associated mental health risks and gamer suicides. 

“The immersive and addictive nature of online games, particularly with monetary incentives, has led to significant mental health issues among users—especially children, adolescents and young adults," as the government puts it. 

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The Promotion and Regulation of Online Gaming Bill, passed by the Lok Sabha on Wednesday, treats online games where actual money changes hands apart from e-sports and social games where it does not (even if users pay an access fee). 

This seems to solve the blurry-line problem of telling games of skill apart from those of chance, which various courts have had to ponder as a test for online gambling. Laws on wagers of fortune and what count as such differ across states. So do the types of app-based games that pool in money. In framing online money games as a distinct category, this  legislative move targets a boom space by skirting that trap. 

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The Centre, on its part, must ask itself whether an addictive activity can be banned without its impact going askew from its intent. The bill proposes to plug any potential loop-holes. Thus, it will criminalize the advertising of such platforms, while any bank enabling transactions through such apps will face penalties; their senior executives would be hauled up for their role to be put under a scanner. 

Even so, money gaming will probably prove hard to end. But that is no reason for the Centre not to try sorting out the present patchwork of varying state laws. States like Tamil Nadu, Karnataka and Andhra Pradesh have banned online money gaming outright, others like Sikkim and Nagaland require registration, and still others like Telangana restrict certain forms of online gambling. This maze makes space for operators to game the system and evade state laws. 

Needless to say, if the proposed law is enacted, it will deliver a body blow to India’s gaming sector, throwing investments and jobs into jeopardy. That, however, is not the point; legislation must focus on the larger common good, not the profits of a few. But then, if the country’s common interest is at stake here, why let the good be the enemy of the best? Regulation would not just work better than a ban, while filling state  coffers if taxed punitively, but also conform with ideals of individual and market liberty.