Google has announced its intention to allow all forms of real-money games on the Play Store, pending approval from self-regulatory bodies in India following the establishment of a new regulatory framework. This decision is expected to provide a much-needed boost to skill-based gaming companies in the country, which have been grappling with a recent 28 percent Goods and Services Tax (GST) imposition on the real-money gaming segment. Industry experts anticipate that this tax change could significantly impact sector revenues, potentially hindering its growth prospects.
Google’s move follows the launch of a year-long pilot program in September 2022, during which it allowed daily fantasy sports and rummy apps by developers incorporated within India on the Google Play Store. The pilot program is scheduled to conclude on September 28, 2023. The company has now updated its support page, indicating that no new apps will be accepted into the pilot program once it concludes. However, existing apps participating in the program will have a grace period until January 15, 2024, to remain on Google Play.
A Google spokesperson stated, “We intend to enable distribution on Google Play for all Self Regulatory Bodies (SRB) verified online real-money games that comply with our policies. We are closely tracking all developments in this regard to determine next steps and timelines.”
In April, the Ministry of Electronics and Information Technology (MeitY) introduced amendments to the IT Act 2021 related to gaming. These amendments empower multiple self-regulatory bodies (SRBs) to decide whether real-money games, involving the exchange of money, can operate in India. While four applications for forming SRBs have been submitted, they have not yet been officially notified. Union Minister Rajeev Chandrasekhar stated that initially, three SRBs will be notified to regulate real-money gaming, with the possibility of more being added later, depending on the workload.
During the ongoing pilot, Google has restricted the distribution of these real-money games to India only. The company had also specified that these apps should not use Google’s in-app billing or be listed as paid apps on the app store. Consequently, Google has not imposed any fees on these apps, unlike other apps on the Play Store. Prior to this pilot, Google had a strict policy against allowing real-money games on its platform.
Executives in the real-money gaming industry have welcomed this move, highlighting its potential to significantly reduce marketing costs, thereby enhancing unit economics. It is also expected to streamline the installation process for users, who previously had to manually sideload these apps onto their smartphones, a cumbersome process involving downloading the Android Package (APK) file from alternative sources.
Deepak Gullapalli, the founder of Head Digital Works, a skill-based gaming firm, noted that this change would improve app discoverability, enhance security for customer transactions, and build trust among consumers in these companies. According to a recent FICCI-EY report, the real-money gaming segment accounted for 77 percent of India’s gaming sector revenues in 2022, reaching INR 13,500 crore. These revenues are projected to grow to INR 16,700 crore in 2023 and INR 23,100 crore in 2025.