The Indian Governance and Policy Project (IGAP) believes that India’s new Digital Personal Data Protection (DPDP) Act will have a significant impact on the country’s rapidly growing skill-based gaming industry, as per a report by

IGAP highlighted that the DPDP Act marks a significant shift in India’s privacy landscape, introducing a comprehensive framework for personal data protection. 

The release of the draft rules by the Central Government, now open for public feedback, has been welcomed by the IGAP as a positive step towards the effective implementation of the law.

The IGAP emphasised that the new regulations will particularly affect skill-based gaming, such as video and money games, where compliance requirements for data fiduciaries are more stringent compared to the previous Information Technology Act of 2000. 

New regulatory mechanism for ‘skill-based gaming’

The DPDP Act, as noted by IGAP, will impose stricter regulations on how personal data is handled, especially regarding behavioural tracking. Additionally, the IGAP pointed out that the draft rules impose severe restrictions on the behavioural tracking of children, aiming to enhance privacy protections for minors. 

To comply with these rules, skill-based gaming companies will be required to implement verifiable parental consent measures before collecting or processing the personal data of minors. 

The IGAP also stressed that seamless and cost-effective age verification systems will be crucial for the successful implementation of these rules, underscoring the importance of innovative data management solutions.

The report concluded by pressing upon the importance of innovative solutions for effective data management. It also pointed out that gambling companies would need to make substantial changes to their data processing practices to comply with the new legal framework.

India’s gaming revenue to double in few years 

For the unaware, India’s legal framework categorises a game as a ‘game of skill’ if the outcome is predominantly determined by skill, whereas games based largely on luck are classified as games of chance. 

India’s gaming industry, which includes real money gaming (RMG) and casual gaming, is forecast to double its revenues over the next four years, reaching Rs 33,000 crore (€27.21 billion), growing at an annual growth rate  of 14.5 percent from 2023 to 2028, according to official estimates.

Tax fight continues in apex court 

While the Digital Personal Data Protection (DPDP) Act is viewed as a step towards fostering a regulated environment for gaming, several challenges remain. 

One significant issue is the ongoing tax dispute between the Indian government and gaming service providers. The government proposes a 28 percent Goods and Services Tax (GST) on the total entry fee for online gaming contests, effectively taxing the entire prize pool. 

Moreover, the DPDP Act could face challenges from the gaming sector in future, potentially impeding the industry’s expansion.

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