A Fine Balance

Twenty five year old Karthik completes a vocational training course to become an electrician in Tumkur district, Karnataka. Unable to find a job, he notices a popular Bollywood actor playing a game of cards in an advertisement on TV. The actor makes it clear that it is easy to make money playing this game called poker, all that is needed is a smartphone, internet connection and some money. Karthik downloads the app, starts playing, and before he realizes, he loses his meagre savings. He borrows money from friends, steals more from his family and loses that as well. Seeing no way out, he ends his life.

The above is a fictional example of how a game of cards involving money can lead to suicides. Unfortunately though, actual suicides have happened, and at a concerning frequency in some Indian states. Certain states like Tamil Nadu and Andhra Pradesh have even banned online card games citing these deaths.

The Finance Minister of India recently hiked a central tax on all online real money gaming activities in India, bringing it at a level that the entire industry is expected to be wiped out. India has seen about $2.5 billion USD flow into the impacted sector in the last few years, and naturally a lot of people are up and about trying to lobby the Government against this harsh move. These include entrepreneurs, investors, professional gamers and operators.

As a professional poker player who primarily plays online, this move is likely to leave me without a living. It is also likely to leave 50,000 or so people out of job – this number includes professional players like me, gaming operators, ordinary folks working in support etc. It will also lead to severe job losses in the coastal state of Goa, which is heavily reliant on tourist income (tourists today flock to casinos in the state, and casinos have been included in the ambit of this tax).

But such is the reality of India, that the Government must weigh its choices very carefully. The job losses are real, but so are the suicides. There are no easy decisions.

Gaming companies have come together to lobby against this move. The strongest rebuttal offered is that such a tax will only push players towards illegal foreign websites, which would result in the Government missing out on tax revenue, while the youth continue to fall prey to gambling. However, this argument is somewhat flawed – while it is certain that black-market apps will increase in the absence of regulated players going away, the overall usage of real money gaming apps should go down considerably.

So am I saying that the Finance Minister is correct in effectively banning a sunshine sector? No, definitely not. All I am saying is that there is a lot of nuance in this issue which will get missed out should you listen to only one set of stakeholders.

To me, at least a chunk of the responsibility for reaching where we are today lies with the operators too. Marketing games at the cusp of chance and skill as a way to get rich quickly was never the most intelligent way to go about things. Yes, it brought in a lot of new users, but most of these users were probably unsuspecting youth who had little idea of the complexity of the game they were playing. Operators should also be doing a far more stringent check of their user’s source of income than they currently do. Making sure a player is not losing more than a small percentage of their source of income is a practice already in place in gambling websites in most advanced countries. Further, marketing poker as a mind-sport akin to chess is only a recent phenomenon in India, and it is one that needs concerted push should the Government reverse its decision.

The way forward for gaming companies is to work with the Government on establishing a strict code of regulation, high level of Know-Your-Customer, betting limits, and poker education. They should also refrain from using mainstream media for advertising purposes.

The house is divided on whether the Finance Minister and the Tax council will reverse their decision. One can only hope they consider the voice of every stakeholder before enforcing a law that will overnight eradicate an entire job-creating sector from the Indian eco-system.