Playing for lives: Indian state bans online gaming over addiction fears but industry cries foul

Last year, a 45-year-old homemaker in the south Indian city of Chennai played rummy online for the first time. Placing a small bet, she was pleasantly surprised to win 500 Indian rupees (US$6) from just a 20-minute mobile game.

Feeling encouraged, she started a new game, and from then on, she began playing for six hours every day, placing higher stakes - 500 Indian rupees - for bigger returns. When she exhausted her money, she borrowed from different loan apps and her relatives. By September, she had lost over 1.8 million Indian rupees (US$21,760).

"When her relatives asked her to repay the loans they gave her, she consumed poison in an attempt to kill herself in sheer helplessness," Chennai-based psychiatrist Lakshmi Vijaykumar, who prescribed antidepressants for the game addict, told This Week In Asia.

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Elsewhere in south India, seven Tamil Nadu residents reportedly died by suicide this year following huge financial losses linked allegedly to online gaming. The deaths prompted the state earlier in October to ban online games of chance, such as poker and rummy, as well as online gambling. Those who flout the rules face jail, fines of 5,000 rupees (US$60) or both.

The gaming industry plans to challenge the ban, claiming many gamers use virtual private networks to access the games, making it difficult for the crackdown to be effective.

"The ban would only benefit fly-by-night and illegitimate market operators who encourage illicit gaming activities," said Sameer Barde, CEO of Mumbai-based E-Gaming Federation, a non-profit that provides operating standards to its eight operator-members to to self-regulate the Indian e-gaming sector and safeguard players' interests.

Barde said an estimated 80 million Indians play rummy online, and that the Indian Supreme Court has held that rummy is preponderantly a game of skill and not of chance. Barde said he would challenge the ban because rummy is protected under Article 19(1)(g) of the Indian Constitution.

A person who plays a game of chance wins or loses by sheer luck, while one must use knowledge and expertise to win a game of skill.

Games of chance - essentially gambling - are illegal in India except a few states including Goa, Barde said, but games of skill are legal even if played for real money.

Vijaykumar, who was part of a Tamil Nadu four-member committee headed by retired judge K Chandru to study the effects of online gaming, said online games of chance, including rummy and poker, were major causes of suicides in the state.

In 2021, Tamil Nadu ranked second in the country in terms of the number of suicides (18,925) after the western state Maharashtra of (22,207). Nationally, bankruptcy is one of the reasons for suicide besides addiction and unemployment, according to the National Crime Records Bureau.

A June report by US-based Sensor Tower, a leading mobile app ecosystem data provider, said the Indian market had the highest number of monthly downloaded games in the world, followed by the United States and Brazil.

The Indian gaming market, valued at US$1.02 billion in 2020, is expected to reach US$4.88 billion by 2026.

Experts said the cheap 4G internet connection and increasing number of smartphone users were the main reasons behind the industry's growth, with RummyCircle, Rummy Passion and PokerBaazi as its key players.

The Indian Cellular and Electronics Association - the apex body of the mobile and electronics industry - and consulting firm KPMG had predicted in 2020 smartphone users in India would rise to 820 million by this year. There are about 750 million smartphone users now.

Growing at a compound annual growth rate of 38 per cent, Barde said the 15-year-old online gaming sector in India held significant potential for overall "economic growth and employment opportunities".

Chandru, however, justified the ban, saying there would be a "sense of fear among people" about taking part in games of chance now that they were illegal in Tamil Nadu.

But Unmesh Joshi, co-founder of Mumbai-based non-profit Responsible Netism, which promotes cyber wellness, said creating awareness about game addiction was essential as a ban alone would not help and many gamers engaged in criminal activities to fund their addiction.

"Many pro gamers also create content on video sharing sites to guide other gamers, and get paid by these sites. Often, they lend money to addicts who play for higher stakes," Joshi said.

When people start losing money in the game, unsolicited advertisements on gaming sites direct them to loan apps which push them to lose thousands of rupees, according to Chandru.

Tamil Nadu's new law will penalise people for putting up ads on the banned games.

But Barde said instead of imposing a ban, the "state must regulate operators" to ensure they do mandatory identity verification to prevent underage gamers from playing real-money games. Operators must also keep gamers' financial details safe and offer features such as daily spending limits and restricting play for certain periods, he added.

In the past five years, six states including Telangana, Odisha and Nagaland banned online gaming but illegal operators continue to operate.

In 2020, police arrested a Chinese national in Telangana for running online gaming and betting activities worth millions of rupees.

Chandru urged the Indian government to enact a national legislation as only then "an effective ban can be enforced".

The government, however, was "committed" to start-ups in every aspect of the digital economy including gaming, Rajeev Chandrasekhar, minister of state for electronics and information technology, said in June.

This article originally appeared on the South China Morning Post (SCMP).

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