Not All Are Pleased By Google Play's Pilot For Real-Money Gaming Apps In India
Google has opened its doors to developers to make their apps available. But what made it possible?
Google Play's announcement to allow daily fantasy sports and rummy apps in India might see app developers "making a beeline" for the platform, though not all are satisfied with the move.
The pilot programme—meant for developers incorporated in India, to build apps solely for users in India—will run from Sept. 28, 2022, through Sept. 28, 2023, according to the Android maker's blog.
In India, the sector has seen three unicorns—Dream11, Games24x7, which operates Rummy Circle and My11Circle, and Mobile Premier League. They claim to have around 8.5 to 13 crore users on their platforms. But given Google’s policies on gambling, these apps are not available on the Play Store, and users have to use specialised links to download them on their devices.
With the pilot programme, Google has opened its doors to developers who can make apps available to an extensive audience in India, for now.
What Made It Happen?
According to Durga Bose Gandham, partner at DSK Legal, the Supreme Court in its Avinash Mehrotra judgment has specifically held that fantasy cricket is a "game of skill". In another Supreme Court judgement, it held that rummy is also a "game of skill".
It was followed by high courts of Tamil Nadu, Karnataka and Kerala striking down amendments to the respective legislation prohibiting "games of skill", including fantasy cricket and online rummy, Gandham said.
These judgements may be one of the key reasons for Google’s shift in stance, Shoubhik Dasgupta, partner at Pioneer Legal, told BQ Prime.
"This also can be a reason why the Play Store has opened itself only to rummy and fantasy sports and not to other real-money games such as poker, which may or may not be considered as a game of skill depending on the rules being applied."
Given Google's extensive market share, gaming companies are likely to "make a beeline" to release their apps on Play Store, while also opposing the discriminatory nature of the decision i.e. only allowing rummy and fantasy sports, Dasgupta said.
What Works And What Doesn't
Social gaming platform WinZO's co-founder Saumya Singh Rathore agrees. Google's change in stance is welcome, but the exclusion of real-money skill games, except rummy and fantasy, is "discriminatory", said Rathore.
She cited the precedent set by the Supreme Court, where it held that success in such games depends upon a substantial degree of skill.
"It is unreasonable for Google to only allow rummy and fantasy games while foreclosing the door for all other skill-based games that cumulatively form a bigger user base of over 500 million monthly users in India."
From a commercial standpoint, this decision could give a boost to apps that are permitted versus those that aren’t—to the extent of 70-75%, she said. And it could result in long-term distortion in favour of entrenched players and discourage innovation, Rathore said.
Other developers such as Bhavin Pandya, co-founder and co-CEO of Games24x7, are optimistic about it.
"This could potentially be a game-changer as the Play Store has seen a 200% increase in active monthly users in India last year," Pandya told BQ Prime.
According to Nitish Mittersain, joint managing director at Nazara Technologies Ltd., players in the fantasy gaming space have found it difficult to make large investments in the space without clarity on taxation.
"We've been asking for clarity for a long time, so we can double down on this opportunity," he said.
Mittersain views Google's change in stance as a "positive step". "We are hopeful they have also got more details, that the landscape in India is becoming clearer."
From a business perspective, the move will drive down the cost of user acquisition significantly and apps can then gain from organic discovery, he said.
Nazara's acquisitions, over the last few years, have seen it add the Hyderabad-based skill gaming company OpenPlay Technologies, which operates Classic Rummy; and HalaPlay that offers fantasy cricket, football, and kabaddi. As of the quarter ended June 30, revenues from these sources made up only 6% of Nazara's total topline.
"Right now, real-money gaming is only 6% of our revenues. We're waiting for clarity on GST slabs, how real-money gaming will be taxed," said Mittersain.
One must keep in mind that this is a pilot programme, and Google can only be expected to tweak its policy with the passage of time, said Dasgupta.
"The regulatory bodies in India will take note of this step by Google, but I doubt it will have any major effect on the state legislatures and the courts, as different states have passed different laws in this regard and more such laws are in the pipeline," he said.