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RSS body seeks cap on entry fee for online games amid regulatory pressure

RSS body seeks cap on entry fee for online games amid regulatory pressure

New Delhi:

An influential Indian nationalist group will push for a cap on entry fees for players of paid online games, potentially turning up the heat on a multi-billion dollar industry that is preparing to lobby against tougher rules. .

The rising popularity of real-money games, a subcontinent craze, fueled by the backing of top celebrities in cricket, has prompted regulatory efforts to tackle the risk of addiction and reports of financial loss and suicide among young people.

Research firm RedSeer says such games could make up 53% of the gaming market, which is set to reach $7 billion by 2026, or three times the size of last year.

“The size of the ticket should be regulated. It should not exceed Rs 50. It is an addiction,” said Ashwini Mahajan, an official of Swadeshi Jagran Manch.

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

Although equal to only 62 US cents, the proposed cap represents a significant proportion of the 25 cents, or 31 cents, typically spent by 97% of users on apps like Mobile Premier League, for example.

An industry source estimates that the small remaining 3% of users contribute 30% of the platform’s revenue by playing high ticket-sized games.

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

The measures, in a confidential draft reported by Reuters last week, have worried an industry in which Tiger Global and Sequoia Capital have invested in providers of fantasy sports games such as Dream11, MPL and Games24X7 that play cricket and other paid competitions. offer.

Dream11 is valued at $8 billion, while MPL and Games24X7 are valued at around $2.5 billion, as Pitchbook data shows.

While the panel’s report did not set any fee cap, four senior gaming industry sources said on condition of anonymity that such a move would impact revenue and growth potential of the platforms.

He promised to take up his concerns with the government.

The Ministry of Information Technology, which had 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. The other two firms did not immediately respond to requests for comment.

Sameer Barde, chief executive of the e-Gaming Federation, a group that represents the MPL and Games 24X7, said the companies “can’t really work” with a similar ban on deposits and that such limits are imposed on players. Called it “inappropriate”.

The new federal rules are intended to address industry complaints over “inconsistent” rules by India’s states, individual court rulings governed by sportsmanship or chance, and addiction concerns, the panel’s draft showed. Is.

Another concern for the industry is a government scheme for a regulator to assess whether a game is based on skill or opportunity.

Such a federal investigation, two sources said, would have a greater impact on the Sequoia Capital-backed MPL, as it offers around 70 real-money games, while Dream11 has just seven fantasy sports games, including cricket and soccer.

“Most mature industries are quite clear that regulation will only help,” Barde said.

“But the worry is, if it takes too long to get approved, you could end up being irrelevant to the market by then.”

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