Soumitra Bose on issues facing India’s real money online gaming industry and the road ahead for operators, governments
2nd November 2021
Interestingly enough, the online gaming market, despite being saddled with a clutch of PILs, litigations, bans, complaints, and harsh regulations, continues to rake in millions of dollars and rise like a unicorn both literally and figuratively.
While the country’s arbiters have been putting their heads together to decide the destiny of this new-age sector, there are some aggregators and experts who have been closely observing this space and articulating its journey.
One such personality is veteran journalist Soumitra Bose, currently a senior editorial consultant with Outlook Magazine. Soumitra has been associated with India’s topmost media companies like NDTV, Hindustan Times, ESPN, and Star Sports.
To discuss his views, understand the finer points of India’s online gaming market, and decode the complexities in the online gaming space especially with regards to the litigation and bans, G2G News invited him on its flagship video series Game On With Jay Sayta, which aims to aggregate India’s online gaming community and bring together its most important stakeholders to discuss key aspects of real money gaming in India, legal and regulatory frameworks.
Tracking the online gaming industry’s story for years, Soumitra is one of the only experts who can offer an informed perspective on the perception battle that the real money gaming scenario is facing today.
Speaking about India’s relationship with gambling, he shares that Indians by nature are gamblers in life. He explains, “Ever since the pandemic struck, We all got to know about these kinds of activities which have actually existed for far longer. It (games played for monetary stakes) is nothing new in India. We are a country that historically has wagered on things. The Mahabharata examples or other texts in our mythology, there are several cases where people have put bets on certain things including their wives. So it’s nothing new though. We are by nature, gamblers in life. And now that life is increasingly getting uncertain, we tend to gamble.”
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According to him, the onset of the internet brought on a challenge where people tried to exploit this historical preoccupation rightly or wrongly.
Touching upon the antiquated anti-gambling laws in India, he shares, “When the rules were framed for the prevention of gambling, those were different times. So a lot of things have happened. So frankly, you know, as a journalist, I get confused at times, but when I get my feedback from many quarters, who are in the industry, I think that there are a lot of grey areas. And a lot of people are taking advantage of situations.”
He believes that the real money gaming business is extremely fragmented with more of one-upmanship as everybody is trying to beat each other and make money which is unethical. Explaining the reason why he has been critical of the industry, he shares, “This exists everywhere in the world. Everybody likes to take advantage of situations and my reason for being critical is that nobody is sitting up and taking a decision that you know, they should be rules and regulations in place and lives should not be lost. So that is the bottom line and we can discuss each and every point.”
He clarifies that even in his criticism, he is not critical of the overall industry. “I’ve nothing against the industry. I’m against the principles, ethics, and the ways businesses are being operated,” he adds.
Real money gaming advertisements have drawn flak with many calling them unethical, immoral, and even misleading at times. Despite the guidelines issued by the Advertising Standard Council of India (ASCI), hyperbolic advertisements with small and hardly visible disclaimers at the bottom are rampant. He feels that unethical advertising is the root cause of all the overarching confusion and issue.
Citing an example, he explains, “When an Olympic champion promotes something that seems… to be honest. I’m no one to judge what is or isn’t ethical.. but at end of the day, these are personal matters but when the three Indian cricket captains and top film artists are promoting things, you have to ask them first whether they think it is ethical or unethical. Billions of people know an Olympic champion or an MS Dhoni so if they are promoting something, then the assumption is that there must be something right about it. It is very normal for people to get attracted or hooked to things thinking what they are saying is correct. A disclaimer doesn’t help anything, it is just following certain rules.”
Explaining the ineffectiveness of disclaimers, he shares, “When you put a disclaimer on the box of a cigarette, you stop smoking? You don’t. You look at the stats and figures; people have not stopped smoking or drinking alcohol despite the fact that they are injurious to health. In fact, the maximum number of WhatsApp jokes and videos that circulated during the pandemic was about the number of people who are cleaning up to buy alcohol. I mean you can any kind of regulations and stipulations but at the end of the day, the buck stops with me; what I perceive.”
Over the past couple of years, RMG brands have deployed aggressive strategies to promote their product with the help of celebrity endorsements. According to him, the gullible population that looks up to celebrities gets drawn to these applications when their favorite star or sportsman endorses it. He shares, “If I become a fan of Dhoni or Virat Kohli, Ganguli or Bindra, I will obviously get influenced. Only earlier this week, there was this barber who won one crore by paying just 50 rupees. It is like a lottery and lottery is banned in India, largely.”
He gripes that the Ministry of Broadcasting and ASCII which initially fronted as the watchdog of the ecosystem has been rather tepid in their response. He shares, “The company which is involved are so powerful that they can manage to keep the voices quiet. And if I’m going to write, they’re going to be after my job. So this is the problem. You know where journalism is going; you write something right But the guy picks up the phone and calls the CEO asks why you’re writing this?”
Citing another example of adverts by an offshore betting company that contradicts the Indian laws, he shares, “There is a betting company which is openly advertising their products on a well known Indian sports channel. Betting is illegal in India but all over Europe, it is accepted. They’re a European company and they are based out of England but they have their offices in various offshore places and they are advertising big time on Indian Television during live cricket. Not just one but this is across channels and websites.”
Highlighting the inconsistencies in the government’s approach to enforcing laws, he shares that the foreign betting company wasn’t allowed to pay a professional fee to him for his sports content work as the government stopped them from sending a remittance yet they are openly showing their advertisements during live cricket shows.
The reason for all these confuddling practices, he ascribes, is the absence of a unique body of law or legislation to take control of the situation. He adds, “This has to be at the central level because there are many things that are state subjects. One state is saying something and the other is saying something else. There are five southern states; four of them are saying something and one is saying something else. At the end of the day, it is harming the business.”
According to him, different laws for different states scantily make sense as the smartphone operating people like himself are traveling most of the time. Shining a light on the bizarreness of the banning approach, he shares, “In this modern world, I am a very mobile professional person; today you are here and tomorrow, you are there. I might like to play Fantasy Cricket so we are all mobile professionals. Let us say; I am traveling between Tamil Nadu and Andhra Pradesh. You really don’t know where the border ends and within a few kilometers, you might be there or here. The problem is that one state has banned it and the other is fine with it. If I want to play something with my own money. There is a lot of confusion.”
For the sake of uniformity, it has been repeatedly observed that certain things should be decided by the central government and not the states. He shares, “You see the way the high courts are giving their judgments; one high court is saying something and the other high court is saying something else.”
Reflecting on the deadly repercussions that the Karnataka Police Amendment bill has had on the livelihoods of people, he shares, “They are saying that the way these Karnataka Govt. is trying to stop these rummy companies; there are at least 91 companies which are operating from Bangalore and operating in the space; small or medium level. There are more than 4 thousand people who are involved in these backend jobs. Overnight if you say that I am going to stop rummy and you can not operate, where will these companies go? Whether it is online gaming or something else; everybody is in the area of uncertainty as if the pandemic was not enough, we are adding more problems to our lives. That means the lives of these companies and the people who are working with them are now dangling; we really don’t know what is going to happen.”
The uncertainty, he feels, is having an adverse effect on the entire industry. To address the issue, he prescribes that a uniform regulatory approach should be brought in akin to the ones formulated for Telecom and Finance industry. According to him, instead of a blanket ban, there should be regulations in place that should be uniformly followed by big small medium-level operators.
Self-regulation, according to him, which the industry forms for themselves hasn’t worked in gaming (or in any other sector for that matter) “I don’t want to name any companies but it hasn’t worked and that’s why when you have those Harshad Mehta scams, why did we have SEBI? I am a salaried person and I don’t have fortunes to spend but I want to have some money for my daughter’s wedding. I will only put my money in a trusted place. The biggest problem in this industry is the lack of trust in the online gaming industry. People who are in it are addicted to it. I and you will not do it but the barber who put in 50 rupees to win a crore and you are advertising that guy; that means every barber is going to do it and maybe his daily income is not event 100 rupees.”
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There is what he calls a ‘trust factor deficit’ in the industry. “The moment you can bridge and give confidence to me that you will play to a certain level and if you’re not good enough to play, you will not play; this business is only going to prosper and more and more people will fund these operators,” he submits.
The role of the media is causing the government to take the banning approach has been brought into question. With a few isolated incidents like robbery or even suicide being sensationalized prominently, the press, especially the regional press has been extreme in their reportage. He feels that there is a lack of awareness amongst reporters who cover events ignorantly without understanding the entire story.
“I can challenge that the guy who has reported that suicide story because somebody had gambled money doesn’t understand anything about real money games 100 percent. He is probably a crime reporter and he has no knowledge about the online gaming industry. For him, it is a story of suicide. He is bridging that story with gaming and gambling; two broad terms for gambling and betting; oh my god, we’re all ethical people and we take a moral standpoint. People read your story and you get a lot of page views and the guy is very happy. The guys who are reporting have no clue about real money gaming. Three years ago when I started trying to understand; I thought everything was the same. It is people like you who educated me and said no; they’re different. Some people think Esports is gambling; Esports is not gambling. Playing rummy with my wife or my daughter is not gambling,” he expounds.
During Diwali in North India, he points out, every household will have a glass of wine and play cards with money. “That’s an internal thing. And people know where to stop. But when it comes to playing online, you’ve been tempted to play on and on and on and you may win and you may lose. That’s why you need regulations. That regulation will not happen with the individual operators. Some of the operators who are trying to regulate themselves but there are many operators who don’t want to do it,” he appends.
The self-regulatory approach has largely proved to be a failure as many operators have refused to comply with the rules formed by the bodies; and given that there is no retribution for flouting them, operators looking to maximize profit ride roughshod over the agreed-upon regulations.
He shares, “There is a complete disharmony among the operators, the people who are making the money want to get richer. That’s why all these disclaimers are useless.” Speaking about the courts, he shares, “Some of the judges have said that is not for them to decide but for the legislators or the people we elect to decide as to what is right and what is wrong.”
He shares that the solution to this regnant problem is to create a system that is trustworthy and acceptable; meaning responsible gaming where there are limits imposed. Expressing a disagreement with the prohibitory approach taken by the Karnataka Government, he shares, “If I was the Karnataka Government, I would have taken a middle path, I would have said let’s fight it out in court, but the legislation in place and the state government has a viewpoint and the company also has a viewpoint; something that Madras did for some time. Of course, now they want to bring in their own set of rules and laws but they were told by the court that what they are doing is not right.”
The beauty of this business, he shares, is that despite the bans and regulations, investors are coming in and pumping in millions into these companies. He rhetorically asks, “Why can’t government which calls itself so forward-looking and digitally-inclined sit down and call the operators individually and not the bodies that they have formed to start discussing? Especially the chief ministers like the one from Karnataka are from the ruling government. Does it mean he has approval from the central ministry? Everyone is working in silos and that is the biggest problem because nobody is taking the bull by the horns. The Operators who want to make money are taking advantage of the situation.”
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Fantasy Sports out of the real money gaming category has particularly witnessed huge growth over the last three-four years across all sports. Along with sponsorships, endorsements from former and current cricket captains and other celebrities have made it flourish exponentially.
Soumitra opines that Fantasy Sports has helped the sports ecosystem grow. “One of the brands has also gotten involved with the Indian Olympic Association and they have given crores of rupees when they didn’t have any money which indicates that this company has a broader mindset,” he shares.
Over the past few years, fantasy companies have shown tremendous interest in sports foundations as part of CSR contributions. Cocking a snook at these moves, he remarks, “Now, whether that is something that comes from the heart or comes from the head, I don’t know because whether or not it is part of our business plan to circumvent certain things is something we don’t know.”
He continues, “But assuming that they have good things in mind for the promotion of sports. One thing is that Cricket has gained hugely from Fantasy Sports. I also hear that one of the companies was involved with an international board. There is now a question mark over that Association. Like for example, there is one brand that for one season became the title sponsor of IPL. There is confusion everywhere. There is confusion across branding and money. What do you want to do? Yeah, but the bottom line is, you cannot stop the common man from choosing what he wants to do. You cannot control two billion people.”
Fantasy gaming brands, he asserts, have leveraged their association with sports to go to the next level. “Despite the bans, they continue to make money and investors are investing more and more,” he adds.
“If the government still does not realize this and puts everything in a streamlined, builds the trust factor and enables proper ways to play the games, then there’s no question…. I am not in support of banning as it does not help because you will always find ways to do it. Then you would go to the offshore betting companies and play,” he concludes with a hope that someday there will be uniformity in the approach at the highest level of the government.
With an overarching uniform legislative framework, the online gaming space will have much stronger tailwinds.