Indian gaming industry giants are moving to enter the NFT gold rush and the central government is planning to regulate crypto as assets. The utilization of NFTs into online betting looks imminent.
Non-Fungible Tokens – the New Eldorado
The giants of the Indian online gaming industry, including platforms Dream11, the Mobile Premier League (MPL), and Nazara’s Nextwave Multimedia – the creator of the World Cricket Championship (WCC) franchise, are busy working to launch their own non-fungible tokens (NFTs).
The NFT gold rush was fueled with sales of non-fungible tokens over online P2E (play-to-earn) game platform Axie Infinity passing the $3 billion mark in November 2021. Backed up by the substantial growth in user base which the gaming sector is enjoying, industry players now seek to follow the NFT-based P2E model, with experts viewing NFTs as potentially replacing in-app purchases (IAPs) which reportedly have grown more than tenfold within the last three years.
NFTs answer numerous demands, as Nextwave Multimedia founder and CEO P. R. Rajendran explains: “For instance, people play WCC for years, some also find it as part of their childhood. Over the period, these users have accumulated a lot of assets and now for it to be used, they share their login and password with other users. NFTs can streamline this along with other use cases.”
The growing number of crypto users and tech-savvy young people, combined with the rising appetites of excited investors will keep driving the growth of NFTs in the world of gaming.
“This play-to-earn model will be a game changer for the Indian companies as it will give a reason especially to the new users, a reason to play. Both the real-money and the non-real-money segments will be benefited but the key is how these companies will integrate these NFTs into the game,” says Nazara Technologies CEO Manish Aggarwal.
How Should Betting Sites React?
Due to their nature NFTs receive real-world value from the moment of their creation so it seems only natural for online betting operators to enable the use of NFTs on their platforms or to find some creative ways to implement and utilize them.
Considering the unregulated status of NFTs and the volatile prices with unpredictable rapid and huge-amplitude fluctuations, NFTs bear risk within themselves and betting on NFT prizes looks like placing a bet within a bet.
Nevertheless, given the size and growth of India’s online sports betting market, especially its cash cow – online cricket betting, the incorporation of non-fungible tokens by the industry seems inevitable and it will be interesting to see what sector operators will soon be looking to gain first-mover advantage.
The Centre Plans to Regulate Crypto as an Asset
A significant shift of central government policy moving from previous plans for a full ban on digital currencies to regulating crypto as an asset seems to clear the regulatory risk standing before the advance of NFTs in the gaming and betting industries.
After a series of discussions behind closed doors between the Centre and representatives of the crypto industry, the government is intending to table a bill dealing with cryptocurrencies for the winter session of the parliament. The new bill is to prohibit cryptos as a payment method, as well as “active solicitation” or advertising from crypto companies and exchanges, but will permit and regulate trading of crypto as assets.
A lot of details remain to be clarified along the way, with the crypto industry lobbying for the creation of a regulatory sandbox to calibrate the regulations. One of the major undecided issues is the identity of the regulatory body, reportedly the task could be handed to the Securities and Exchange Board of India, but no decision in this regard has been finalized yet.
“Regulating crypto as an asset doesn’t solve all the issues that authorities are concerned about, but it does take it out of the currency arena, which is one of RBI’s worries,“ says Tanvi Ratna, founder and CEO of Policy 4.0, a think tank.
Defining the asset class of crypto and how the regulator should proceed with huge price differences and arbitrage opportunities arising from the existence of multiple exchanges are among the major issues that remain to be clarified.
