Games of skill vs Games of chance: Framework looks to clarify difference

Will be sent to Meity for feedback to be added to 2nd draft

In an effort first of its kind, statistician and Padma Shri awardee Bimal Roy, in collaboration with The Dialogue, has come up with a comprehensive framework to differentiate between games of skill and games of chance.

The framework has been formulated in consultation with industry stakeholders like the All India Gaming Federation, one of the largest industry bodies for the Indian gaming sector, and will be sent to the Ministry of Electronics and Information Technology (Meity) for feedback. This feedback will later be incorporated in the second iteration of the framework.

Roy is former chairman of the National Statistical Commission and former director of the Indian Statistical Institute.

Until now, India lacked an industry-wide standardised mechanism to differentiate between skill- and chance-based games. While court rulings have classified certain games and have laid down a qualitative test, there has been no consistent scientific test for game classification.

“In a world where online gaming is rapidly evolving, regulatory clarity is paramount. The framework offers not just a solution for today’s challenges but a foundation for the future of gaming regulation in India,” said Roy to Business Standard.

The report is the first version of the framework and plans to continuously evolve based on further feedback from the industry, the government, and emerging trends in the gaming industry, Roy told.

Dubbed the “Skill Games Framework”, the initiative has been developed through engagement and consultation with industry experts, game developers, legal advisors, and gamers, and offers “an objective framework to determine permissible online real money games” though a scientific and data-driven method.

“Our goal is to empower regulators and developers with a tool that champions fairness and ensures that skill-based gaming thrives under a transparent, data-driven system,” he added.

The report takes into account three core components to determine the role of skill in game outcomes: Persistence of skill, which analyses whether top players consistently perform better over time; experience gap, which measures whether experienced players regularly outperform other players; and exemplary skill, which identifies individuals with outstanding performance.

The new framework aims to address this gap by offering “an objective, transparent, data-backed solution that regulators, developers and the judiciary can trust”, with developers hoping for widespread adoption by the industry and the government.

“This objective and scientifically validated approach will help regulators distinguish between games of skill and chance, provide guidance to developers, and subsequently help safeguard players’ interests,” said Kazim Rizvi, founding director of The Dialogue.

Rizvi added the report offered much-needed protection against misleading game classifications and unfair practices, ensuring that players engaged in legitimate, skill-based games.

Kriti Singh, chief of staff and programme manager of gaming policy at The Dialogue, said: “Our framework has three key objectives: First, it extends the existing jurisprudence by offering a quantitative method to distinguish between games of skill and games of chance, allowing for a more precise and objective determination.”

“Second, it serves as a tool to differentiate legitimate platforms from illegitimate ones, ensuring fair competition and consumer protection. Third, it aims to establish an industry standard that can be widely adopted, fostering trust and credibility in the sector,” she added.

This comes at a time when online real money game developers in India are reeling from a newly imposed 28 per cent goods and services tax, which does not differentiate between games of skill and chance.

> Until now, India has lacked an industry-wide standardized mechanism to differentiate between skill-based and chance-based games.

> The report will also be sent to the Ministry of Electronics and Information Technology (MeitY) for feedback. This feedback will later be incorporated in the second iteration of the framework.

> In April last year, the Centre had notified new rules for online gaming with a provision of creating multiple self-regulatory bodies (SRBs).

> These SRBs would certify a ‘permissible’ real-money online game and prohibit wagering and betting on internet platforms by developing a verification framework.

> The new Skill Games Framework aims to address this gap, with the developers hoping for widespread adoption by SRBs and the government.