Rising Concerns for Safety in India's E-Gaming Sector

Rising Concerns for Safety in India’s E-Gaming Sector

by Arthur Herring
in Action, News, Release, VR, xEN
on 10 July 2024

India has witnessed a significant rise in the number of participants in the e-gaming sector. While this growth brings promising opportunities, it also raises concerns about the safety and security of users, particularly the vibrant and young demographic. To address these concerns, Grant Thornton Bharat and the E-Gaming Federation (EGF) have released a whitepaper focusing on the importance of adhering to a strong Code of Conduct and embracing self-regulation.

The Code of Conduct outlined in the whitepaper aims to tackle key risks such as cyber threats, regulatory uncertainties, and financial risks. It provides best practices to mitigate these challenges and ensure the sustainable growth of the industry. The gaming sector encompasses various verticals, including e-sports, real money gaming, casual gaming, and fantasy games.

Anuraag Saxena, CEO of E-Gaming Federation, emphasized the need for a whitelist in the e-gaming sector to keep “bad players” at bay. He also highlighted the importance of enforcing regulations against these “bad players.” A whitelist refers to a list of entities that are granted certain privileges or recognition.

Drawing parallels with the content economy, Saxena expressed optimism about the potential economic growth in the gaming industry. He compared the wealth creation in the content economy to the possibility of similar growth in the gaming economy.

The whitepaper was unveiled by esteemed individuals such as Prof (Dr) GS Bajpai, Vice Chancellor of National Law University Delhi, and Priyank Kanoongo, Chairperson of the National Commission for Protection of Child Rights, among others.

The E-Gaming Federation (EGF), established a few years ago, works to safeguard consumer interests and self-regulate the Indian e-gaming sector. Currently, EGF has several companies as members.

Looking ahead, Saxena hopes that the government recognizes the legitimate part of the gaming industry. He emphasized the need for clarity on which companies and game formats are considered legitimate.

To safeguard the interests of minors engaging in gaming, EGF mandates Aadhaar and KYC protocols. Saxena highlighted the importance of stringent norms being mandated across the board to avoid consumers being steered towards the grey market.

Shalabh Saxena, Partner and Media Industry Leader at Grant Thornton Bharat, emphasized that the Code of Conduct is an internal commitment of the EGF, with Grant Thornton assisting in setting higher standards. He also pointed out the need for regulatory clarity in the gaming sector and the government’s intent to address these concerns.

With India’s robust IT infrastructure, increasing mobile penetration, and advancements in technologies like AI, VR, and AR-VR, the gaming industry is on a remarkable growth trajectory. India currently has the second-largest gaming user base globally, with the number of online gamers reaching 442 million. The industry is projected to experience a 20% growth by 2024-25, with an estimated worth of Rs 231 billion.

While the industry faces challenges, including regulatory clarity and distinguishing between games of skill and games of chance, investor sentiment remains strong. The whitepaper notes that it is crucial to understand these distinctions to effectively regulate the real-money gaming ecosystem.

In conclusion, as India’s e-gaming sector continues to expand, ensuring the safety of users and promoting responsible gaming practices becomes paramount. The Code of Conduct and self-regulation efforts by the E-Gaming Federation and Grant Thornton Bharat aim to address these concerns and foster a secure and thriving gaming industry in India.

Facts not mentioned in the article:
1. The e-gaming sector in India is dominated by mobile gaming, with the majority of users accessing games through smartphones.
2. India has seen a rise in the popularity of competitive e-sports tournaments, with large prize pools attracting professional gamers and teams.
3. The Indian government has recognized the potential of the gaming industry and has launched initiatives to promote it, such as the “Digital India” campaign.
4. Online streaming platforms like Twitch and YouTube Gaming have gained popularity in India, with gamers livestreaming their gameplay to a wide audience.
5. The Indian gaming market is not only focused on domestic players but also attracts international game developers and publishers who cater to the Indian audience.

Key questions and answers:
1. What are the main challenges in ensuring safety in India’s e-gaming sector?
One of the main challenges is addressing concerns related to online security and cyber threats. Additionally, distinguishing between games of skill and games of chance is another challenge for regulators. Establishing a clear regulatory framework and enforcing it consistently is also crucial.

2. What controversies are associated with the e-gaming sector in India?
One controversy is the debate over whether real-money gaming should be considered gambling and subjected to the same regulations as traditional gambling activities. There is also controversy surrounding the potential negative impact of excessive gaming on mental health, particularly for young users.

Advantages of the e-gaming sector:
1. Economic growth: The gaming industry has the potential to contribute significantly to India’s economy, generating revenue through job creation, taxes, and foreign investments.
2. Skill development: Gaming can enhance cognitive abilities, problem-solving skills, hand-eye coordination, and strategic thinking.
3. Entertainment and social interaction: Gaming provides a form of entertainment and a platform for social interaction, fostering community engagement and connections among players.

Disadvantages of the e-gaming sector:
1. Addiction and health concerns: There are concerns about excessive gaming leading to addiction, sedentary lifestyles, and potential negative impacts on physical and mental health.
2. Online security risks: The online nature of gaming exposes users to cyber threats, including hacking, phishing, and online harassment.
3. Potential for exploitative practices: Some gaming companies may engage in unethical practices, such as targeting vulnerable users with excessive in-app purchases or misleading advertisements.