Susan O’Leary talks about the steps being taken in India to protect customers as the market awaits the legalisation and regulation of iGaming.
Discussing the opportunities and challenges presented by grey markets is very much a hot topic in igaming of late. While the US market has demanded the lion’s share of attention, and Latin America and African countries continue to make encouraging progress, one market that has been less talked about is India.
India is a market with almost unparalleled potential. Take a brief look at the evidence: a country with a population of 1.3 billion people, the world’s sixth largest economy (according to the IMF) and growing at an annual rate of 7-8%, and a rapidly improving digital infrastructure and mobile connectivity.
Add to this a strong sporting and gambling tradition, and a study by KPMG India and Google predicts that India’s igaming market could generate $1 billion per year in revenues by 2021.
However, to achieve this growth in a sustainable fashion, it is fundamental that India’s online gaming community works together to implement an infrastructure that ensures consumers are protected and that there is fairness and integrity in the sector.
The current landscape
Games of skill are currently considered legal in India, but only the immensely popular card game rummy is acknowledged at a federal level. Other games, particularly poker and DFS, have also enjoyed impressive growth in the market and protection in some provinces.
More formal and wider-reaching regulation could soon be on the table too, with the country’s Law Commission currently studying sports betting with a view to recommending whether or not it should be formally regulated. Progress is slow, but legislation could ultimately see horse racing and sports betting defined as games of skill.
Whatever the verdict, it is important to remember there remains a harm factor around these activities, regardless of whether they are classified as gambling or games of skill.
Indeed, many of these activities are more commonly regarded as gambling in other territories such as the UK.
The question we need to be asking is how to balance the nuances of a regulatory framework in a country the size and scale of India. It needs to be fit for purpose and proportionate, minimising harm and protecting consumers while also ensuring fairness and integrity throughout the Indian online gaming market. Achieving this will be no mean feat.
Fortunately, India appears willing to embrace regulation and learn lessons from other jurisdictions and regulators.
It is early days, but compared to the US, which has a similar federal/state structure to India, it looks as though India’s legislators will be keener to refer to the examples of Europe and elsewhere than many US states when it comes to introducing sustainable gaming laws.
Given the size of the Indian market and the growing number of operators and suppliers that are keen to enter, it is important to act swiftly. Frameworks to protect consumers need to be in place from the get-go, and it will not be enough to delay acting until the Indian government formally introduces new regulations.
For this reason, we have recently been working with the All India Gaming Federation (AIGF) to put in place a self-regulatory framework designed to protect consumers from possible harm.
A study by KPMG India and Google predicts that India's iGaming market could generate $1billion per year in revenues by 2021
Earlier this year, the AIGF announced an opt-in scheme covering the skill gaming sector. The Skill Charter was a reaction to the lack of guidance from the government. It provides for the creation of an advisory panel to help maintain high standards of consumer protection in India’s skill gaming industry.
The charter includes a number of provisions designed to protect consumers. For instance, it prohibits signees from offering and promoting real-money wagering on games of chance to players partaking in games of skill.
It also introduces detailed guidance across a range of areas which directly impact on the user experience and its relationship to consumer protection. It obliges operators to maintain separate bank accounts for operations costs and user funds, as well as conducting verification checks ahead of player payouts.
And most encouragingly, it introduces extensive rulings around responsible gaming. These include a requirement for operators to allow users to set daily, weekly and monthly deposit limits. It also requires operators to put into place ‘time out’ and self-exclusion protocols.
Finally, it offers detailed guidance on poker, rummy and daily fantasy sports, covering a range of technical areas to ensure the games are offered in a responsible fashion.
Setting an example
Operators must lead from the front on responsible gaming, rather than reacting to public pressure. If you look at the FOBT debate in the UK, and the long list of heavy fines handed down to operators by the UK Gambling Commission for breaching marketing and player protection rules, it is clear that public perception of the gambling industry has suffered as a result.
While the journey towards a full regulatory framework for the Indian igaming market is a slow one, this gives operators an opportunity to take the initiative and learn from the mistakes of others elsewhere.
By displaying a willingness to self-regulate and act responsibly, it should also encourage legislators to steer clear of introducing regulation that strangles the igaming market at the outset.
Towards a regulated future
Of course, this is only a small step on a longer journey towards the full regulation of India’s igaming market. As already mentioned, progress has been slow, but there are encouraging signs that the country will make smart choices to create a sustainable sector.
While the AIGF framework is an innovative approach to the lack of formal regulation, ultimately enforceable rules will need to be introduced. It would be advisable for lawmakers to follow the lead of the AIGF in consulting with other regulators, such as the Alderney Gambling Control Commission (AGCC), when drafting its framework.
The AIGF standards are not enforceable at the federal or provincial level, but the AGCC provides a model for an Indian regulator to introduce many of the provisions already laid out in a way that is enforceable.
The question we need to be asking is how to balance the nuances of a regulatory framework in a country the size and scale of India
As ever, the collaborative approach is the best. Working with experts, other regulators and bodies such as the International Association of Gaming Regulators will give India a significant head-start and hopefully speed up the process.
Around the world there has already been a huge amount of work done in ensuring harm is minimised in the gambling industry and that consumers remain safe and protected. India must draw upon this expertise if it wants to ensure the very highest standards for its consumers. To achieve this there are several international initiatives, such as the multi jurisdictional testing framework that looks to harmonise technical standards, to which it can turn.
It is fantastic to see jurisdictions such as India, the US and many others waking up to the idea that regulating online gaming is the best way to protect consumers. But the battle has not been won yet. Governments, operators, regulators and other stakeholders still have a huge task ahead to introduce regulation that safeguards the customer.
In many respects, the debate over exactly what should be classified as a game of skill in India is not the priority. Led by organisations such as the AIGF, the challenge now is to ensure consumers in India and elsewhere are protected, regardless of whether they are playing a game of skill or a game of chance.
This article first appeared in iGaming Business Issue 111, July/August 2018