Cap sought on entry fees for online games amid regulatory push

Swadeshi Jagran Manch, an Indian nationalist group, will push for limits on entry fees for players of paid online games, Reuters news report said.
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The popularity of real-money games 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 percent 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,” Ashwani Mahajan, an official of the Swadeshi Jagran Manch, said.

Though 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 percent of the users on an app such as Mobile Premier League, for example.

The remaining share of 3 percent users contributes 30 percent of the platform’s revenue by playing higher ticket-sized games, according to estimates.

Tuesday’s comments by the group, the economic wing of the ideological parent of the ruling Bharatiya Janata Party (BJP), come after a government panel called for a new regulatory body and recommended deposit and withdrawal limits.

The measures, in a confidential draft reported last week by Reuters, have alarmed an industry. 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, PitchBook data shows.

Such a move would affect revenues and the growth potential of platforms.

Sameer Barde, chief executive of the E-Gaming Federation, a grouping that represents MPL and Games 24X7, said companies can’t really function with a uniform restriction on deposits and called such limits unfair to players.

Such federal scrutiny stands to have greater impact on the Sequoia Capital-backed MPL, since it offers about 70 real-money games, while Dream11 has just seven fantasy sport games, including cricket and soccer.