TECHNOLOGY: In an interesting event lately, Karnataka, which is also home to some of the world's biggest tech companies and India's tech capital Bengaluru, has sought for banning online games that involve betting and wagering.
Karnataka is now the fourth Indian state to seek to ban online games involving prize money after Telangana, Tamil Nadu, and Andhra Pradesh.
"Business of MPL, Dream11 and everyone in the sector will suffer," said one gaming industry source.
"These states are important - they roughly account for 20 percent of (the total) business for such companies."
The online gaming industry in India has grown over the past few years. Foreign investors have shown a growing interest in backing Indian gaming startups since last year as the COVID-19 pandemic drove people stuck indoors towards such games.
India currently has more than 400 online gaming startups and, as of 2020, had around 360 million gamers, according to an EY-All India Gaming Federation report. Online gamers are expected to grow to 510 million by 2022 and the industry will be worth $2 billion (roughly Rs. 14,750 crores) by 2023, the report said.
The Dream11 and MPL platforms, offering paid contests with cash prize for players, have expanded rapidly in recent months with extensive marketing and hires. Dream11 is seeking a US listing by early next year, local media has said.
Such growth has sparked concerns that these platforms, like gambling, are addictive and can cause financial harm.
India's Tamil Nadu, Telangana and Andhra Pradesh states have all banned online gaming offering cash prizes over the past few years, though Tamil Nadu's bill was subsequently struck down by its high court.
The Karnataka proposal also comes at an inconvenient time for the industry, during the popular Indian Premier League cricket tournament. Fantasy gaming competitions around the tournament are one of the biggest fee generators for online gaming companies, said a second industry source, who asked not to be identified.
The potential ban will also hurt professional players, said Esports Players Welfare Association, a non-profit for online gamers.
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