Tuesday, June 18, 2024

A changing scenario on the cards

Muskan Sethi, 33, has just returned to Delhi from Goa. A mark of her success as a professional poker player is the BMW Mini that sits on the driveway of her upmarket apartment building in south Delhi. Inside her apartment, where a wide-angle monitor is connected to a gaming PC, Sethi says she is in Delhi for a brief visit and will go back to Goa soon.

Sethi was among the first in India to play internationally. She has built a personal fortune from her victories — over ₹35 lakh in public games alone, according to one estimate — and has a considerable following on YouTube. Sethi plays up to four games simultaneously on the YouTube channel ‘PokerBaazi,’ an online poker platform for which she is a brand ambassador. She consistently gets over a thousand views on her games.

“There are thousands of hands in poker,” Sethi says, referring to the two cards dealt to each player in a game of No Limit Texas Hold ‘em. This is the popular variant of poker that she has played for years. Sethi displays a colourful grid of card combinations on her phone. Her eyes light up as she starts describing strategy, with terms like “range” and “board texture,” and how those concepts inform her play.

For someone who plays a game that is a favourite in casinos, Sethi talks more with the air of an investor rather than a gambler. “I believe in return of investment,” she says. “You don’t have to play every hand. You can even play 10 hands and you’re sorted.” In fact, she rejects the term ‘gambling’ for professional poker. This seemingly calculated approach to the game may be strange to some. However, television channels in the United States have, since the early 2000s, made household names of poker players, while also attracting celebrities to programmes like Celebrity Poker Showdown, in which they play each other for charity.

Sethi started playing poker with real money in 2014, shortly after her mother’s death. Before that, she used to play on Zynga Poker, a casual app on which no real money is needed. As there were few Indian sites that allowed staking cash at the time, she joined a ‘free roll’ tournament on a foreign poker site, where she had to be in the top 0.1% of players. She won $75, and qualified for an audition to play on TV in Europe. She was thrilled. “My idol Liv Boeree was sitting there. She was one of the pros I had to play against,” she says, beaming. Boeree is a British professional poker player and TV presenter, and a strong influence for Sethi.

In the years since, Sethi has played internationally multiple times. In 2018, she was feted by then President Ram Nath Kovind as ‘India’s first woman to play professional poker.’

Decades of jurisprudence

The buzz around staking money on card games in India is recent; casinos are, after all, banned in most parts of the country. The exceptions to this are Goa, Daman and Diu, and Sikkim. Sethi often travels to Goa to play on international waters.

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How then did players like Sethi, and card games like poker and rummy, become all the rage? The rise of “real money gaming” apps, which are referred to as online gambling apps in Australia and the United Kingdom, where the gambling laws are less demanding than in India, played a significant part, says lawyer Deepro Guha, a senior manager with The Quantum Hub think tank, which has worked with such platforms.

But before these apps came along, decades of jurisprudence laid the groundwork. The Public Gambling Act of 1867 banned most betting and gambling with the exception of “game[s] of mere skill,” says Guha. Under the insistence of B.R. Ambedkar, Chairman of the Drafting Committee of the Constitution, States were given the authority to regulate gambling and betting.

But the definition of that term became narrower with time. “The issue began when States started to regulate what they considered gambling or betting, but petitioners in those cases disagreed saying those were games of skill and that they shouldn’t be prohibited from playing such games,” says Guha.

The first major case that dealt with this ambiguity was R .M.D. Chamarbaugwalla v. Union Of India. It was filed in the Supreme Court in 1957 after the Union government passed a law in 1955 limiting the scale and payouts of “prize competitions” such as crossword puzzles where participants sent in solutions by mail. The crosswords challenged in the Court case pertained to puzzles that had no set solutions. An adjudication committee received responses by post to determine the skill involved.

“This was the first time that the court really went into what would be a game of chance and what would constitute a game of skill,” Guha says. “And that’s where the thinking evolved to what is now called a ‘preponderance of skill test.’” This, he says, weighs how important it is to be good at a game as opposed to how much chance is at play. In 1968, the Supreme Court held that rummy, another card game that is often played for money, passed this test. In 1996, betting on horse racing also passed this test.

When online platforms started cropping up, they worked to narrow the scope of betting and gambling regulation even further. In recent years, three High Courts and the Supreme Court concurred that betting on daily fantasy sports was also a game of skill.

In daily fantasy sports, players can bet on sportspersons based on the latter’s real-life performance. They can build a ‘fantasy’ team which they think will prevail over other given sets of sportspersons or fantasy teams. When the performance of sportspersons improves in the real world for a given fantasy team, the statistics in the platforms also improve. This allows players who bet on well-performing virtual teams to earn money on their bets on those teams.

Despite these games being legal, most casinos are restricted to only those games that are adjudicated as ‘games of skill.’ Guha speculates that the main reason for this was economics. While casinos traditionally take a cut of player winnings, they tend to make more on slot machines or games like blackjack. These machines and games have a so-called ‘house edge,’ which gives the establishment an advantage. Running a physical establishment with just games of ‘skill’ is not financially attractive.

But when games are run on the Internet, and players can connect from anywhere, everything changes. Playing costs so little that even with a modest commission on winnings, platforms stand to earn large amounts of money.

While poker has not been scrutinised as horse racing and rummy have been by the apex court, online platforms to play the game have proliferated and are available in most States.

Financial ruin and suicide

Not everybody who stakes their fortune on real-money games online enjoys success like Sethi, however. Gopalakrishnan (name changed), a 41-year-old Hindu priest in Chennai, is on the brink of financial ruin. Five years ago, he saw advertisements for an online rummy platform on social media. Long ago, Gopalakrishnan had won substantial sums of money at a small rummy club on Anna Salai — a legal establishment because of the Supreme Court ruling — and so the opportunity to win online was too tempting to pass up. Shortly after starting, he claims, he made ₹1,20,000.

But as he continued playing, losses piled up. And over the years, Gopalakrishnan became addicted, playing 14 hours a day instead of half an hour as he initially used to. “I lost ₹20 lakh and reached the limit on three credit cards,” he says. “Today, my wife and I are struggling. This [habit] makes people inhuman. I started lashing out at my children.”

Gopalakrishnan says the problem is not just the money, which can be earned eventually; he also developed vision problems from staring at the screen for long hours and developed high blood sugar, possibly due to all the stress of playing and losing. “I stopped playing in 2022. Since then, my monthly income has been going in paying off my loans. I’m living pay cheque to pay cheque,” he says.

Gopalakrishnan’s story is not unique. Tamil Nadu has seen a spate of deaths by suicides — at least 17 in three years until July 2022 — of people who notched up losses playing on these apps. Both the main political parties — the All-India Anna Dravida Munnetra Kazhagam (AIADMK) and the Dravida Munnetra Kazhagam (DMK) — have attempted to outlaw real money games in the State. The first attempt by the AIADMK-led Tamil Nadu government was struck down by the Madras High Court, and the State has appealed the decision in the Supreme Court. The second attempt came from the DMK-led government, following a report by a committee headed by retired Justice K. Chandru. The State government passed a Bill in the Assembly to outlaw online rummy and poker. However, Governor R.N. Ravi returned the Bill without providing his assent. As courts across the country have repeatedly kept many of these ‘games of skill’ outside the scope of ‘betting and gambling’ in the Constitution, the Governor’s options may be limited. This week, the State Assembly once again unanimously adopted the bill to ban online gambling.

Draft amendment

Between the extremes of Sethi and Gopalakrishnan are players who rein in their reckless impulses without necessarily making it big. Niranjan Nakhate, a Mumbai-based founder running a start-up to aggregate freelance telemarketers, discovered poker through Zynga’s free game, like Sethi did. Shortly after his previous company collaborated with an online poker platform called Spartan Poker, Nakhate, 30, says he started playing online casually. He had previously only played games that were “not very high stakes” with friends.

Nakhate started spending more time on the game on a different platform when he was cloistered in his family home during the COVID-19 lockdown in 2021. “That’s when I played the most,” he says. “Every night I used to play online. My friends would also be online, and we’d just take up a table [together].”

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Overall, he only put in ₹2,000, and stopped playing for over a year after his deposit swelled to three times that amount. As interest in playing waned, he thought he would use that deposit to play at some point if he felt like it. If money wasn’t an issue, why did he play with real money? “If you play without money, people just go all in,” he argues. “Having real money at stake makes for more interesting games.”

But not everyone gives up easily or knows when to stop playing. The Union government has assumed administrative authority to regulate ‘online gaming.’ In a draft amendment to the Information Technology (Intermediary Guidelines and Digital Media Ethics Rules), 2021, the government defined an online game as one which “is offered on the Internet and is accessible by a user through a computer resource if he makes a deposit with the expectation of earning winnings.”

The industry rejoiced. The real money gaming industry has only suggested minor modifications to some aspects of the proposed regulations. The amendments would largely codify in law what many platforms are already doing, such as warning players of financial risks, maintaining know-your-customer (KYC) information on users, and submitting to the authority of a self-regulatory body.

States, meanwhile, may not be able to prohibit these platforms, notwithstanding the social costs such as addiction and deaths by suicide. This is because platforms have won legally many times and the Union government has asserted its administrative authority over these sites.

Reflecting on his struggle with his rummy addiction, Gopalakrishnan is clear on his opinion on the game of skill versus gambling debate: “This is gambling. There is no ‘game of skill’ here at all.”

The industry is poised to grow astronomically. A report by the All-India Gaming Federation estimated that the Indian real money gaming industry would cross $2 billion in value this year. Aside from a proposed 28% Goods and Services Tax that may soon be imposed on deposits, the runway for the real money gaming industry is largely clear. The new legal framework will grant legitimacy to the concept of staking money for winnings and hand a long-dormant industry a kind of legal safety net and economic power.

#changing #scenario #cards

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