Context: The government is having a strict eye on the Opinion trading platforms, questioning their validity on parameters of 'game of skill’ and 'game of chance’.
Relevance of the Topic:Mains: GS and Ethics paper; scope of impacts,provisions and opinion on legality.
Opinion Trading
- Opinion trading platforms are the applications that seek the opinion of people on diverse fields in 'Yes’ or 'No’.
- Allows betting: These apps allow the user to bet some amount and win on the basis of their answer.
- Rise in domain: Various applications like Probo and MPL opinion trading are growing by receiving funding or more than 35,000 crores. Also, there is an expansion of the user base, for instance Probo has a user base of more than 5 crore.
Game of Chance versus Game of Skill
1. Definition:
- Games of chance are the games whose outcomes are based on luck or random factors, with the minimum influence of players' decision making.
- Examples: Casino games and Dice games
- Legal status in India: These games are considered as gambling and addressed by the State laws. Further, they are heavily taxed and regulated.
- Games of skill are the games based on the decision-making, expertise and strategy along with the players knowledge.
- Examples: Esports and Video games
- Legal status: Considered as competitive in nature and are not regulated under gambling regulations.
Note:
- India is the fastest growing mobile gaming market and the annual revenue of the overall Indian gaming industry is expected to almost double to $6 billion by 2028 from $3.1 billion in 2023.
- Under the 7th Schedule of the Indian Constitution, the States have the authority to regulate the realms of "betting and gambling." Different states of India have enacted their own legislation on betting and gambling.
Debate over Opinion Trading:
- Opinion trading as Game of Skill:
- Dedicated skill committee: Platforms argue that they have constituted the dedicated skill board to look into the skill required to answer the questions.
- International precedences: Countries like the US have a separate regulator for the opinion trading platforms like Kalshi, an opinion trading platform of the US.
- Choice of fields: Platforms argue that their questions are majorly based on the politics, sports and major global events that require long-term analysis and experience to answer.
- Opinion trading as Game of Chance:
- Random events: The questions are based on the random events that have no role of skill and decision-making.
- Example: ‘Will Australia be able to take three wickets in the last over?’ Such questions are random in nature.
- Using legal loopholes: The platforms are using legal voids to avoid the regulations.
- Example: Platforms lack questions based on Stock market to avoid SEBI regulations.
- Uncontrollable circumstances: The results of the events asked are beyond a person's ability to predict and influence, making it a chance based domain.
- Random events: The questions are based on the random events that have no role of skill and decision-making.
Legal status on Opinion Trading in India:
- There is no dedicated regulatory body to regulate opinion trading. Though certain aspects of applications fall under the purview of the IT Ministry.
Way Forward
- Dedicated regulator: A dedicated regulator can help in reducing the arbitrariness in the domain of Opinion Trading.
- Learning from international experiences: India can learn from the nations like the US to regulate the Opinion trading by defining the do's and don'ts.
- Public guidelines: The IT Ministry and the Finance Ministry can issue guidelines for the public to make them aware about the risks associated with such platforms.
Conclusion: Regulating opinion trading in India is crucial to ensure transparency and safety of public money. Clear guidelines, stringent monitoring and robust penalties can curb the manipulations and misinformation. A balanced approach fostering market innovation, ease of doing business and prompt regulation by the government can ensure a fair market for consumers and investors of such applications.