Swadeshi Jagran Manch has pressed for a cap on entry fees for online games, a plan to approach the government

Swadeshi Jagran Manch Pushes for Limits on Entry Fees for Online Games, Plans to Approach Government

The Swadeshi Jagran Manch, an influential group in the country, will push for a cap on entry fees for paid online game players, potentially turning up the heat on the multi-billion-dollar industry which is gearing up to lobby against tougher regulations. The growing popularity of real-money games, backed by top figures in cricket, a subcontinental craze, has prompted regulatory efforts to combat the risk of addiction and reports of financial loss and suicide among young people. Research firm Redseer says such games could make up 53 percent of the gaming market that could reach $7 billion (roughly Rs. 55,800 crore) by 2026, or three times its size last year.

“The size of the ticket should be controlled. It should not be more than Rs 50. It is an addiction,” said Ashwani Mahajan, an official of the Swadeshi Jagran Manch, which is seen as a significant influence on policy-making in the country.

“We will talk to all relevant ministries about this,” he told Reuters.

Although equivalent to only $0.62 (roughly Rs. 50), the proposed cap represents a significant amount of Rs. 25, or 31 cents, is typically what 97 percent of users spend on an app like Mobile Premier League, for example.

An industry source estimated that the remaining small share of 3 percent of users contribute 30 percent of the platform’s revenue by playing higher-ticket size games.

Tuesday’s comments came after a government panel, the financial wing of the ideological parent of the ruling Bharatiya Janata Party (BJP), called for a new regulatory body and recommended limits on deposits and withdrawals.

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In a confidential draft reported by Reuters last week, the move saw Tiger Global and Sequoia Capital invest in fantasy sports games providers such as Dream11, MPL and Games 24X7, which offer cricket and other paid tournaments.

Dream11 is valued at $8 billion (roughly Rs. 63,800 crore), while MPL and Games24X7 are valued at $2.5 billion (roughly Rs. 19,940 crore) each, Pitchbook data shows.

While no fee cap was set in the panel’s report, four senior gaming industry sources said on condition of anonymity that such a move would affect revenue and the platform’s ability to grow.

He promised to present his problems to the government.

The Information Technology Ministry, which set up the government panel, and some top officials from ministries such as revenue and sports did not immediately respond to requests for comment.

MPL declined to comment. Two other companies did not immediately respond to requests for comment.

Sameer Barde, chief executive of the e-Gaming Federation, which represents MPL and Games 24X7, said companies “can’t really work” with uniform restrictions on deposits, calling such limits “unfair” for players.

The new federal rules aim to address industry complaints over state governments’ “inconsistent” regulations, differing court rulings on games governed by skill or chance, and addiction concerns, the panel’s draft showed.

Another concern for the industry is the government’s plan for a regulator to assess whether a game is based on skill or chance.

The two sources said such federal scrutiny has a greater impact on Sequoia Capital-baced MPL, as it offers about 70 real-money games, while Dream11 has only seven fantasy sports, including cricket and soccer.

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“Most mature industries are very clear that regulation will only help,” Burde said.

“But the concern is that if it takes too long to get approved, by then you may be irrelevant in the market.”

© Thomson Reuters 2022

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