Google proposes allowing all RMG apps on Play Store, finalising 'appropriate' business model

"We look forward to continuing to work with the CCI and the wider RMG ecosystem, and are confident our proposed framework will empower Indian developers, grow the digital economy, and prioritize user safety."

Google's RMG pilot in India

Google Play Store is offering daily fantasy sports and rummy apps to consumers in India as part of the company's pilot, which was extended indefinitely in June 2024 to avoid disruption to participating companies.

Google also announced a pause on its plans to impose a service fee on RMGs and expand to other formats, citing the absence of a central licensing framework in certain markets, including India, and the complexities of developing a suitable monetisation model.

In the new proposal, Google has outlined plans to replace the pilot programme with a policy update that would allow developers to distribute all RMG apps they self-declare as permissible under applicable laws and legal precedents on Google Play in India.

India still doesn't have a uniform regulatory legal framework for the rapidly expanding yet increasingly turbulent RMG sector.

Developers would be required to submit proof that their app is in good standing with a reputable and authoritative third-party body that has been recognised in Google’s policies, has met certain criteria and has demonstrated to the company's "reasonable satisfaction" its capability to assess such apps.

These third-party bodies could include skill gaming industry associations such as the All India Gaming Federation (AIGF), the Federation of Indian Fantasy Sports (FIFS), or the E-Gaming Federation (EGF), according to the CCI notice.

Developers would also need to show that the game they intend to distribute has been certified by such a body as a permissible game of skill.

In May, Moneycontrol reported that Meta was collaborating with AIGF, FIFS, and EGF to revise its authorisation process for RMG companies seeking to advertise in India, introducing an additional certification step.

In its proposal, Google said the measure would help level the playing field and address CCI's concerns. Once the proposal is accepted, it would begin permitting compliant RMG apps on Google Play within 120 days.

Real-money gaming executives have previously told Moneycontrol that being available through Google Play Store helps companies to significantly reduce their marketing costs due to better app discoverability and increased trust. This would result in improved unit economics for skill-gaming companies who are already grappling with the 28 percent GST levy on the sector.

The move will also help firms reduce the friction faced by users in installing these games on their smartphones, thereby enabling them to attract a much broader audience.

At present, people have to manually sideload these apps on their smartphones by downloading the Android Package (APK) file of these games from company websites, which can be quite a cumbersome process.

In a statement, WinZO stated that it was grateful to the CCI "for its continued commitment to fostering a fair, open, and thriving digital ecosystem"

"India is home to nearly 20 percent of the world’s gamers and has pioneered micro-transaction–driven models that now account for over 85 percent of online gaming revenues. Yet, Google’s discriminatory conduct has sidelined this wave of innovation, offering legacy Fantasy and Rummy platforms an unfair head start in access, trust, and capital," the statement said.

The company further added "This issue goes far beyond app store access...With the right support, this sector can become a $60 billion global powerhouse in under a decade, powering digital exports, job creation, and India’s rise as a global gaming leader."

Google Play's business model for RMG apps?

That said, the CCI notice does not disclose any specific information on the structure or nature of the eventual business model that Google intends to adopt.

Google levies a 15-30 percent service fee on in-app purchases and paid app sales on Play Store, based on the developer's annual revenue. For the first $1 million earned a year, the fee is 15 percent. Beyond that, the fee goes up to 30 percent. Subscriptions are charged at a flat 15 percent, irrespective of the developer's annual revenue.

For developers that opt for Google’s third-party billing system, the company levies a lower commission of 11-26 percent, marking a reduction of 4 percent on the service fee.

This service fee model, however, doesn't work for RMG apps, as they operates on a different business model centered on user deposits rather than in-app purchases. These apps primarily generate revenue by taking a commission from the entry fees that players pay to participate in tournaments or contests on their respective platforms.

Allowing RMG ads

Google has also proposed permitting advertisement of games of skill in India if they meet the same certification criteria and comply with Google Ads policies. The company stated that it will allow compliant RMGs to advertise within 150 days of CCI approving the proposal.

AIGF CEO Roland Landers stated that Google's proposal to open the Play Store to all permissible RMG formats is a "timely and welcome step toward building a more equitable and transparent digital ecosystem for the Indian gaming industry."

"The inclusion of certification by recognised self-regulatory bodies is an important acknowledgment of the structured compliance efforts undertaken by the AIGF and other stakeholders in the online gaming sector over the years," he said.

"If accepted, Google will recognise AIGF-issued certificates as valid proof for the legal and skill-based classification of games. This reflects the credibility and rigour of the voluntary certification process undertaken by the All India Skill Gaming Council (AISGC)," Landers added.

Established in 2018 under the chairmanship of Justice Vikramajit Sen, a former Supreme Court judge, AISGC claims it has applied an "exhaustive qualitative and quantitative framework to determine whether a game qualifies as one of skill under Indian law."

"As the RMG sector continues to evolve, consistent and fair platform access will be critical to its long-term sustainability...we believe this move will help create a level playing field, reduce entry barriers, and give a much-needed boost to smaller and emerging operators," Landers said.

RMG apps forms the bulk of revenues of India's overall gaming industry that clocked a topline of $3.8 billion in FY24, marking a 22.6 percent growth from $3.1 billion in FY23. The sector is expected to touch an estimated $9.2 billion by FY29, according to a report by gaming and interactive media venture fund Lumikai.