The Indian Online Gam(bl)e China’s success in regulating online gaming could serve as a crucial lesson for India
In the vast world of medical conditions, online gaming addiction is considered a given reality. Yet it remains under-recognised by the Indian government and its policymakers. The World Health Organization (WHO) has given due acknowledgment to the addictive nature of online gaming. However, not only has it been left unchecked in India, a large part of online gaming has mutated and morphed into online gambling,adversely impacting the nation’s younger generation.
The convergence of gaming and gambling not only jeopardises the mental and physical health of our future generation, it also steals their most productive asset-their attention. Meanwhile, lobbyists for online gaming and gambling have been making misleading claims, labelling their activities as a sport and pledging to self-regulate. To check against their potential harm to future generations, however, this exponentially growing ecosystem requires tighter regulation and control involving inputs from multiple stakeholders including clinical psychologists, behavioral economists, and think tanks.
In India, the distinction between online gaming and gambling has blurred. The two platforms, once distinct, have now converged. Gaming-gambling convergence takes shape in terms of social casino gaming, loot boxes, skin betting, esports betting, play-to-earn video gaming, and plain vanilla stakes for games. Recognised as a disease, addiction to online gaming or gambling has surged, sparking numerous issues stemming from excessive participation. The 11th revision of the International Classification of Diseases, published in 2019, defined ‘gaming disorder’ for the first time, acknowledging both online and offline forms. Scientific studies have further confirmed that the addiction related to online gambling mirrors substance abuse.
The Diagnostic and Statistical Manual of Mental Disorders fifth edition (DSM-5) even introduced a new category for non-substance behavioural addiction within the substance addictions category, accommodating online gaming and gambling addictions. Substance Abuse Disorders are addiction to cannabis, cocaine, and heroin-like substances. Numbers for India are not available as none of these platforms shares data of users with the government.
South Korea is often cited as an example of a nation whose youth fell victim to online addiction. The socioeconomic loss due to excessive internet use in the Republic of Korea was estimated at between $1.5 and 4.5 billion in 2009 (Lee, Kim, & Lee, 2011). Online gaming has been identified as the largest health problem experienced by young people by Korea’s Ministry of Science, ICT and Future Planning and the National Information Society Agency (2015).
A substantial part of India’s online gaming predominantly involves gambling. Lobbyists often attempt to depict it as a sport, obscuring the reality with disinformation campaigns about these as involving skill and distanced from gambling as game of chance. Surprisingly, both retired and serving policymakers appear to be going along with this narrative, with many of them considering self-regulation for these companies rather than recognising the inherent risks and challenges associated.
This imitative panorama of the online gaming industry, alarmingly, is not being recognised in India as online gambling, despite every game being played for stakes. Advocates within the sector sermonise about ‘responsible gaming’, an echo of the ‘responsible gambling’ mantra. Even online platforms have jumped onto this bandwagon, touting their ‘responsible acts’. Figures of trust have been co-opted into this advocacy and argue that online gaming platforms can, indeed, behave responsibly.
Taking the Colombian cartel analogy, it’s as if they have pledged to distribute cocaine responsibly, ensuring that no one receives enough to become an addict. Further leaving us agape, they guarantee to cap prices to prevent the harmful effects of resulting addictions, despite the demonstrated plausibility of money laundering on these platforms.
It is surprising how gullible the regulator can be, except for the fact that there is no regulator. One may wonder what came of the talks about appointing a self-regulatory organisation for the sector. Many self-defined organisations applied, but none was finally selected. The government is now thinking about regulating these companies directly. The crucial question therefore is what will be regulated and how will it be regulated.
Will online gaming be regulated as gambling companies, sporting companies, entertainment companies, or just internet intermediaries? The policymakers ought to have learned by now that tech platforms are masters on how to avoid any form of regulation. Examples besides online gaming include social media, e-commerce, communication apps, and several super apps that now manipulate the market in several sectors.
The most straightforward path to regulation is initially licensing these companies, as is customary for gaming or casino businesses-since they ultimately share similarities. The lingering dilemma among policymakers is identifying who will “bell this cat” and call out the problem in its true nature.
The crux of this quandary lies in the abundance of money involved.
Unregulated purse or pool collections occur daily for these companies. Noticing this, the finance ministry smartly brought these collections under the GST net. Despite this, the companies remain unregulated by any government department, as no licences for operating online casinos or gaming currently exist. In contrast, worldwide licensing is commonplace for online gaming platforms.
Just recently, in December, China released draft norms to curb addiction on gaming platforms. Their ability to accomplish this feat hinges on their established licensing process for all online gaming platforms. Under China’s online gaming approval system, companies must obtain an “Online Publishing Service License” to operate legally. Why not consider and learn from such established systems?
No doubt, China’s control over the internet is excessive by any benchmark; it has, nonetheless, managed to create an effective regulatory framework for online gaming that keeps addiction in check. Multiple scientific studies have confirmed the severity of addiction arising from these platforms. Prime Minister Narendra Modi has directly addressed this issue on several occasions in his radio dialogues.
Moreover, the ED, CBI, and RBI have highlighted the ways in which these platforms can be exploited. Chinese firms, in particular, are allegedly using online gaming as a means of laundering money from India. Yet, credit should be given where it’s due: China’s success in regulating online gaming could serve as a crucial lesson for India in addressing its related challenges.
The convergence of gaming and gambling not only jeopardises the mental and physical health of our future generation, it also steals their most productive asset-their attention. Meanwhile, lobbyists for online gaming and gambling have been making misleading claims, labelling their activities as a sport and pledging to self-regulate