SJM Calls for Capping Entry Fee For Online Games
An influential Indian nationalist group will push for limits 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 growing popularity of real-money games, driven by backing from top figures in cricket, a subcontinental craze, has prompted regulatory efforts to combat the risk of addiction, and reports of financial losses and suicides among young people. Such games could make up as much as 53% of a gaming market that is set to reach $7 billion by 2026, or three times its size last year, says research firm Redseer.
“Ticket size should be regulated. It should not be more than 50 rupees. This is an addiction,” said, an official of the Swadeshi Jagran Manch, which is seen as having significant influence on policy making.
“We will talk to all concerned ministries about this,” SJM told Reuters. Although equivalent to just 62 U.S. cents, the proposed cap represents a significant proportion of the 25 rupees, or 31 cents typically spent by 97% of the users on an app such as Mobile Premier League, for example. The tiny remaining share of 3% users contribute 30% of the platform’s revenue by playing higher ticket-sized games, one industry source estimated.
The measures, in a confidential draft reported last week by Reuters, have alarmed an industry in which Tiger Global and Sequoia Capital have invested in providers of fantasy sport games such as Dream11, MPL and Games24X7 that offer cricket and other paid contests. Dream11 commands a valuation of $8 billion, while MPL and Games24X7 are valued at about $2.5 billion each, Pitch Book data shows. Although the panel report did not fix any fee ceiling, four senior gaming industry sources who spoke on condition of anonymity have said such a move would affect revenues and the growth potential of platforms.