The Next Play- Block Chain, Sports and Tourism – Lexology

The excitement and intrigue surrounding cryptocurrency might have fizzled out, but alternate use cases of the blockchain have found roots for varied purposes, such as electronic health records, land records, farm insurance, digital certificates, etc., across as many as thirteen states in the country.

In partnership with a platform called Yunometa, the State of Tamil Nadu recently launched the Women’s Chennai Open in the world of Metaverse and NFTs on September 10, 2022 (https://chennaiopen.co/). With this launch, the synergies between sports and technology are being explored further. Sports enthusiasts will now be able to view the Chennai Open (women) in the metaverse and watch it live.

The Chennai Open Metaverse will have a tennis court where visitors can choose their avatars, including their favourite players, and play a match. There is also a media section where they can visit and get regular updates on the events’ matches. The metaverse will further have two more sections, i.e., an NFT museum section to display tourism and culture for the State of Tamil Nadu and a section for virtual tours of Tamil Nadu’s most well-known tourist destinations, such as Fort St. George, Meenakshi Temple, and Mahabalipuram Temple, amongst others.

It seems to be a great initiative not only to enjoy sports in a new way but also to showcase the culture of Tamil Nadu, which may have a ripple effect on the tourism industry.

According to a recent study by Finder, released in 2022, India is ranked first in NFT gaming adoption. As per the report, around 34% of the Indian population has played P2E games[1], while 11% have shown a willingness to play them in the future.[2] Further, the size of the Indian eSports industry is expected to grow to INR 11 billion by FY2025 and potentially generate an economic impact of INR 100 billion between FY2021 and FY2025.[3]

While the statistics paint an impressive picture of the industry’s potential, it would be imperative to note that the legal landscape is definitely ‘glitching’ while trying to adopt a legislative pathway that would foster yet effectively regulate the sector.

At present, the policy focus of the government pertains to taxation only. However, with the increase in the participation of gamers, it is also prudent to address user safety issues by creating guidelines and standards for privacy, fraud prevention, structuring appropriate KYC procedures and payment mechanisms, and ensuring overall ease of doing business, regulatory certainty, and taxes.

The policy initiatives undertaken by the government in the recent past, including the Online Gaming (Regulation) Bill, 2022, which failed to address key concerns such as privacy, age-verification of players, defining casual online gaming, and money-based gaming, have shown a lack of a comprehensive approach to resolving the crucial issues. Similarly, the Inter-ministerial Panel on Online Gaming formed in May 2022 has, till now, only issued a slew of suggestions ranging from issuing a cap on deposit and withdrawal limits on the game winnings to recommending forming a regulatory body to distinguish between “games of skill” and “games of chance,” differential GST treatment, blocking prohibited gaming formats, and issuing a stricter stance on gambling websites.

In addition, the Animation, Visual Effects, Gaming, and Comics Task Force (AVGC) was set up in April this year and commissioned to formulate a national AVGC policy to attract foreign direct investment in the sector and to recommend a national curriculum framework, facilitate skilling initiatives, and boost employment opportunities within the sector has yet to submit its first action plan.

The Draft Virtual Online Sports Regulation Bill released by the Rajasthan government in May 2022[4] seems encouraging since it envisages structuring a licensing regime and establishing a Rajasthan Virtual Online Gaming Commission that shall be tasked with recommending conditions for licences, recognising “self-regulatory organisations,” and issuing advisories, caution notices, and recommendations to self-regulatory organisations. However, the Bill only applies to “esports competitions, fantasy sports, and derivative formats as provided by the sports engagement platforms” and leaves poker, rummy, ludo, and other such games of skill outside its purview.

It is safe to conclude that, at present, the central and the respective state governments have fallen short of formulating a cohesive set of legislation on online gaming. Further, with the integration of blockchain with gaming, it would also be crucial for the government to finally take a stand on laws regulating cryptocurrency in the country.

Shaping a comprehensive regulation on blockchain gaming would also necessitate the concerted deliberation and collaboration of various stakeholders in the industry, as current laws largely fail to address important concerns such as privacy, fraud, user safety, and so on.