Indian capital markets regulator SEBI will looking into companies offering online games and contests dealing with stocks, currencies and commodities through regulatory arbitrage, local media reports.
One product, known as ‘Stock Race’ allows contestants to pick a stock, currency or commodity and predict the increase or decrease of the price over the next 60 seconds.
One such website, Satyug Gold Pvt Ltd, offers daily and monthly winners prizes ranging from silver coins to cars after they pay 30.9 percent TDS.
Other websites known in the area include Indian Trading League, and SAMCO.
However, a spokesman for Kundra, the owner of Satyug Gold Pvt Ltd, said the contests need not be cleared by the regulator. “It is a matter of fact that many other virtual stock games are being operated in India and internationally, which have been functioning outside the purview of Sebi or the respective exchanges …. As per the Sebi Act 1992, the preamble states that Sebi is to protect the interest of investors in securities and securities market. Securities have been defined under section 2(h) of the Securities Contract (Regulation) Act 1956. In this case a person seeking to play the game is not making any investment (direct or indirect) in a security.”
“Further by virtue of a player playing the stock race game, no rights or interests, arising from the input of points, creates any obligation of delivery. The virtual points can only be used in game and not for placing calls on the stock or commodity market.”
Additionally, the spokesperson said it was a “skill game” and not a “game of chance”, which was essential for something to be classified as gambling.