Every weekend for the past two years, Mukul Ganesh, a call centre employee in Vizag, has camped out on his couch, laptop in hand to play 13-card rummy with thousands of other online players at sites like Games24X7 or Ace2three.com.
He might pocket Rs. 500 for the day, or lose money, but sometimes he would win big, as much as Rs. 10,000 at a time, adding a nice sum to his middling income.
His fortunes — as well as that of an online gaming industry that is estimated to be worth Rs. 200 crore — now rest on a Supreme Court decision that is expected in September.
Madras High Court ban
Trouble started brewing after the Madras High Court prohibited a Chennai club from playing rummy for stakes and from making a profit out of it. While the Supreme Court stayed the High Court decision, after an appeal by the club, it will soon give its verdict on whether games of skill can be played for stakes or whether profit can be made from such games.
Playing games of chance with stakes, or gambling, is generally defined under state laws as an activity that includes chance, a monetary prize, and “consideration,” which means one must pay to play. Remove any one of these three and it becomes legal in most States.
But how much chance has to be removed to make a game legal? “The question is whether chance is a dominant factor in the game,” says Venkateswara Rao, an advocate who represented the Chennai club, pointing out that rummy was declared a game of skill by a 1967 Supreme Court ruling.
The Supreme Court’s actions have put a spotlight on an online rummy industry, estimated by owners of card gaming websites at Rs. 200 crore-250 crore, which has become a vocation for thousands of Indians and a pastime for lakhs of casual players.
As an industry, online card websites have obvious profit potential. While casinos across the world pour millions into hotels, websites require not one per cent of that. While online playing may lack a certain pizazz, websites make up for inconvenience, as players can play a quick round before hitting the sack.
Most big players such as Games24X7 or Ace2three, with player bases of over 5 lakh, make their money by charging a service fee on cash games — ranging anywhere between 5 and 15 per cent. Presently there are over a dozen online rummy websites which offer both free and cash stakes variants of the game that are now in danger of being shut down.
Supreme Court decision crucial
“You know, the fallout from the pending decision just becomes a very fundamental thing, it is either legal or it is not. If it is illegal, then most sites would have to close. Companies such as ours would come to a grinding halt,” said Kiran Kumar, Business Development Manager, Taashtime, a rummy website which sees over 25,000 games played on a daily basis. Taashtime employs over 60 people in its Hyderabad office.
The worst-case scenario for these nascent businesses unfortunately becomes the most murkiest — moving their servers out of the country if the Supreme Court does not uphold the legality of games of skill being played for stakes.
“A lot of websites might want to do that, those of us who have a lot more to lose will have to move their servers abroad, which could lead to a lot of legally-grey situations,” said Mr. Kumar.
Deepak Gullapalli, CEO, Head Infotech Private Ltd, which runs Ace2three.com believes that alternative, although less-profitable, revenue models will be have to looked at.
“While the Madras High Court judgment came as something of a surprise to us, we are hoping that the Supreme Court decision comes through favourably. In the meanwhile if cash stakes cannot be a source of revenue, we will have to look at advertisements and mobile app sales,” said Mr. Gullapalli.
For Mr. Ganesh, the potential crackdown is likely to bring a new career path and a new schedule. “I was joking around with my family, ‘I guess I now have to go out and get a new hobby to while away time over the weekends’,” he said.