Google plans to allow all types of real-money games on Play Store that will be approved by self-regulatory bodies once the new regulatory framework is established in the country.
The move will likely be a shot in the arm for skill-based gaming companies that are currently reeling under the government’s recent 28 percent GST regime on real-money gaming segment. The new tax regime could lead to a significant drop in the sector's revenues, thereby severely impacting the growth trajectory of the sector, industry stakeholders say.
Google's move comes after the tech giant started a year-long pilot in September 2022 to offer daily fantasy sports and rummy apps on Google Play to users in India by developers incorporated within the country. The pilot is set to end on September 28, 2023.
Google has now updated its support page to mention that it will no longer accept new apps into the pilot programme after the pilot ends. However, it will provide a grace period for existing apps that are participating in the programme to remain on Google Play until January 15, 2024.
“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" a Google spokesperson said in a statement.
In April, MeitY notified new gaming-related amendments to the IT Act 2021, that will allow multiple self-regulatory bodies (SRBs) to determine whether a real-money game, where the transfer of money is involved, is permitted to operate in India or not.
While the ministry is learnt to have received four applications for forming SRBs until now, it is yet to notify them. In April, Union Minister Rajeev Chandrasekhar said they will initially notify three SRBs to regulate real-money gaming and may notify more later depending on the workload.
Improved unit economics
In the current pilot, Google has limited the app distribution of these real-money games to only India. The company had also said that these apps should not use Google's in-app billing or be available as a paid app on the app store.
This is why Google doesn't impose any fees on these apps at the moment, unlike other apps on the Play Store. Prior to this pilot, Google had a strict policy of not allowing real-money games on its Play Store.
Real-money gaming executives had previously told Moneycontrol that the step will help them significantly reduce their marketing costs, thereby helping them improve their unit economics.
It will help them reduce the friction faced by users in installing these games on their smartphones, thereby enabling them to attract a much broader audience. At present, users have to manually sideload these apps on their smartphones by downloading the Android Package (APK) file of these games from alternate distribution sources, which can be quite a cumbersome process.
Deepak Gullapalli, founder of skill-based gaming firm Head Digital Works, had said it will also improve app discoverability for users to play these games on their phones and increase the level of security on customer transactions, thereby improving consumer trust in these companies.
Real-money gaming segment accounted for 77 percent of India's gaming sector revenues in 2022 which stood at Rs 13,500 crore, as per a recent FICCI-EY report. These revenues are set to grow to Rs 16,700 crore in 2023 and Rs 23,100 crore in 2025, it said.
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