Working on a larger blueprint for real money gaming space: Nitish Mittersain, Nazara Technologies
What is your understanding of the new legal framework provided by the new rules? I mean, will this change anything for investors at least in the online gaming industry? Is the definition between skill and chance now really clearly outlined?
Yes, absolutely. I think what Mr Rajeev Chandrasekhar released last week under MeitY is actually a game changing policy for the industry. I think two things have happened; one is the government has recognised gaming formally as an industry and started giving guidance around it on how it has to operate. And I think that is a long way that the industry has come over the two decades that at least Nazara has been in business. So I think we are very excited about that. The second thing is the skill-based real money gaming space has been the most monetised segment of the industry. But it has been surrounded over the years with a lot of grey area and unclarity on what is legal, what is not legal, what is a game of skill, what is gambling, how is taxation to be applied etc. And this has prevented at least companies like ourselves to very aggressively invest in these grey areas. I think that is very rapidly changing and the regulatory clarity that we have been asking for since many years is very fast emerging. In this budget you had clarity on online TDS which has come through including the recent amendments. You have MeitY’s gaming guidelines come through. I think the last cog in this wheel is the GST and once that is also clear, I think the whole skill-based real money gaming space is ripe to take off and Nazara is also going to make very aggressive moves in this space now. So I think all around good news for the industry.
Speaking of GST, I just wanted to understand from you because the online gaming rate is likely to remain at about 18% on gross gaming revenues. What would be the implications of this because that would be the same that it currently is, right?
Yes, I think if that comes through it will be the best news for the industry. But I think the more important news really is about the clarity emerging. It has dragged on for a long time and now the sooner the GST part is also plugged in, I think you will have a holistic clarity on skill-based real money gaming in India and that will allow for a lot of growth in this industry.
Skill-based real money gaming and I know we have asked you this time and again, but for your company it is a very small component so what is it that you would like to hear in terms of the clarity on this and what would be the implications on your overall revenue pie on real money?
I think like I just said, a lot of the clarity has emerged, the GST part is the final cog in the wheel and from a Nazara perspective, we have been sitting on the fence. We have 5% of our revenues that come from skill-based real money gaming through open play that we run. But that is a fantastic consolidation vehicle and as we have always stated that as clarity emerges, we will very aggressively invest in this sector and this will allow us for very fast scale-up of revenues in the years to come. So I think at least at Nazara level, we are now very actively working on a larger blueprint for the real money gaming space and you will surely hear more exciting news from our end on this space in the coming months.
Also wanted to understand, how this 30% TDS or net winnings from online gaming in the user account impact you and would it really move things?
It does not again impact us much given our exposure to RMG today but I think it is a short-term hiccup for users to get used to the new policy. I think the new policy is fairly fair. There was some ambiguity with this recent amendments which was kind of also clarified so I think it is a path in the right direction because it was more important to get the clarity and I think that clarity has been achieved.
Do you see after the clarity, this entire skill-based gaming ecosystem becoming big? There was this great start but then policy confusion. Post policy clarity do you think it will normalize for the future?
Yes, I think you will see a large spurt in growth. You will see a lot more investor interest and the good news is that a lot of these guidelines and policies will also really help protect consumers, which is very important for the long-term sustainability of the business. And the last thing is that all the grey market operators, all the international betting companies etc. who have been having a field day in India, operating without any restrictions, will face a lot of challenges operating further once these policies firmly come into place, which also means that the share of the wallet that they were eating into of the consumers will get freed up for more responsible gaming companies to work towards and get better outputs.
