The ongoing dispute between online gaming firm WinZo and Google over the latter’s policy to selectively give rummy and fantasy gaming in its Play Store, can see a final resolution once the ministry of electronics and IT (MeitY) will come up with regulatory clarification on permissible real money games, analysts and legal experts said.
It has been more than a year since MeitY amended the IT Rules, 2021 to incorporate regulations for online gaming. The regulations were aimed at banning games involving betting or wagering as an outcome. Through the rules, the government also laid out the structure of self-regulatory organisations (SROs) that will determine whether a real-money game is permitted to operate in the country or not. However, the same is yet to be implemented.
One of the reasons which Google said in its arguments on not allowing other real-money gaming categories is the potential legal risks arising from conflicting central and state regulations and absence of broader regulations in the country. Experts, however, did not find the arguments from Google convincing on selecting a few real-money gaming formats in pilot and extending that pilot indefinitely.
“This rationale cannot excuse its (Google’s) selective approach, which disproportionately favours certain gaming genres. The lack of regulatory clarity from MeitY regarding permissible RMG (real-money gaming) activities do contribute to the broader issue, but Google’s dominant position imposes an obligation to maintain fairness and transparency in its policies,” said Jidesh Kumar, managing partner, King Stubb & Kasiva, Advocates and Attorneys.
According to Kumar, a balanced resolution would require MeitY to urgently provide clear guidelines for the RMG sector, while ensuring Google implements an inclusive policy framework that grants equal market access to all compliant gaming applications.
In fact, the Competition Commission of India (CCI) acknowledged that the regulatory framework once established, is expected to address the ambiguities.
In September 2022, Google started a pilot programme to test hosting of only two types of real-money gaming on its Play Store – Daily Fantasy Sports (DFS) and Rummy in India for a period of one year. The pilot, however, never ended. The same gave an edge to companies such as Zupee, MPL, Dream 11, who got significant growth in user downloads compared to other skill-based gaming apps, which were not allowed. WinZo says the same eliminates the level playing field and creates a false perception of legitimation of DFS and Rummy over all other games of skill.
“While the pilot programme in itself would not be deemed to be discriminatory, however, a selective approach without a defined period and stopgap could be perceived as discriminatory, limiting market access for other game developers and potentially constituting an abuse of Google’s dominant position in application distribution,” said Kinjal Champaneria, partner at Solomon & Co.
Champaneria said MeitY’s clarifications on permissible RMGs under the SRBs purview would certainly help resolve the issue at hand.
In its response, Google said that the Supreme Court of India (as well as other courts) have recognised DFS and Rummy as predominantly games of skill, and therefore, there is a legal certainty attached to DFS and Rummy which provides Google with additional comfort from a risk assessment perspective.
Experts, however, countered this argument by saying that those gaming formats were taken to the Supreme Court on a dispute that they are not skill-based but involve gambling. After this the Supreme Court recognised them as a game of skills. However, from the start, nobody questioned other real-money gaming formats such as Chess, Ludo, etc, so there is no question of risk emanating from these other formats.
Vidushpat Singhania, managing partner at Krida Legal said, “allowing any and all RMG applications to be listed on Google Play Store could very well result in certain chance-based RMG applications being listed on Google Play Store, which would be akin to Google Play Store promoting gambling in India, thereby exposing Google to additional legal risks”.
According to Singhania, the lack of clarity (from MeitY) has resulted in confusion for the gaming industry regarding the kind of real-money games may be offered to users.
Shiju PV , senior partner at IndiaLaw LLP said, “the legal and regulatory framework of betting and gambling is quite vague and it differs from State-to-State. Even though games which require skill over chance are allowed in the country, the line which differentiates gaming from gambling is very thin. Hence, it is important to address these regulatory ambiguities before taking actions against intermediaries”.
In its submission WinZo also questioned Google’s policy of showing a disclaimer/warning when games apps are downloaded from websites. The company also alleged that Google has restricted its advertisements policy by only allowing DFS and Rummy app advertisers to host advertisements using Google Ads.
Prateek Jain, associate director-Startup and Alliances, Alliance of Digital India Foundation (ADIF) said, “we are positive that the regulator will take appropriate actions to ensure that Winzo and other digital enterprises in India receive a level playing field in a landscape that is currently marred by the monopolistic practices of big tech firms”.
The CCI has currently launched a probe into Google for alleged abuse of its dominant position in the real money gaming ecosystem.