India Trade Group Cautions New RMG Ban to Have Ripple Effect on Gaming Industry

A new law was passed in India that bans all forms of Real Money Gaming (RMG). The Indian government passed this law to try to deal with concerns of addiction and financial issues that have been developing through the use of various gambling and gaming platforms.

India’s RMG Industry’s Meteoric Rise Comes Crashing Down on a Legislative Whim

The industry, which was set to be worth $3.6 billion by 2029, claims that, while gambling is restricted in India, RMG games are based on skill and therefore should not be considered a game of chance.

While to some observers, it may be reassuring that the government has taken action to address an ever-increasing gambling problem, the outcome of the new law may fall short, argues the All India Gaming Federation (AIGF).

The law has placed a huge strain on the wider gaming ecosystem, as it has taken a major source of income for many out of the equation, and it has put many people’s jobs at risk. This new spontaneous ban comes only a few weeks after a 40% tax increase on the gambling industry.

Free-to-play developers, indie studios, and MSMEs areе the most likely to suffer from this new law, since the growth of the RMG industry has been the one providing the resources necessary for their development.

In the law, it is stated that anyone helping an online money game or online mobile gaming service will be in violation of the new rules. Breaking the new law carries huge penalties such as a €100,000 fine or up to 3 years in jail. Banks and financial institutions are no longer allowed to process transactions involving Real Money Gaming Services, as well as RMG.

Businesses Skedaddle from the Market as New Gambling Rules Set In

One of India’s largest online gaming apps – Mobile Premier League – has announced that it will be cutting more than 60% of its staff in an effort to move away from paid games.

Some like fantasy football giant Dream11 and international brands such as Flutter’s Junglee Games have had to halt operations, while others are attempting to challenge this ban in court. Before the ban, the number of RMG startups was around 400, which brought in around $2.3 billion in tax revenue.

It is now believed that India’s offshore sector will have a monopoly on RMG.

Further clarification is expected from policymakers. The full effects of the bill on free-to-play developers and esports are not all certain.