Online Ludo — A Game of Skill or Chance?

After LudoKing became a quarantine sensation in India last year, there is a new and growing debate on the merits of the online game.

The debate has now reached a point of adjudication before the Bombay High Court which is going to determine if online Ludo is a game of chance or skill.

We get it. They are just games. They are meant for leisure and entertainment. Leave them be and let the courts move on to more pressing matters at hand.

Be that as it may, some of these games have managed to break into the multi-million (and close to a billion) dollar leagues in terms of their valuation and revenues over the past year.

While advertising still appears to be the primary monetisation source for a bunch of these platforms, there is an uptick in revenue models allowing real money betting. Which is why it becomes important to find out if their business models are based on making users follow a methodical winning strategy or playing into their gambling instincts.

So, let’s try and understand how much does it take (and pay) to get lucky in a game of online Ludo?

Focus of the Petition

Keshav Muley, the chief petitioner in the matter, says that he first noticed the irregularities when he saw a young boy playing the game Ludo Supreme on his mobile phone. The boy believed that he could “easily” win money in the game.

Once he downloaded and used the game himself, he realised that one could play it by betting money in the form of “entry fees” which is usually in the amount of ₹5 per player. The player who won a game could take all the money put in by the rest of the players barring a certain amount that was deducted by the application.

The anomaly here is the currency value of the pooled winnings. In most other online games, including other Ludo apps, the winnings are in the form of tokens or virtual coins (fictional money) whereas in Ludo Supreme it is real-time currency. The app also allows linking of bank accounts with the in-app wallet to systemise this format.

One could try classifying this money for “in-app purchases”, which have become synonymous with use of App Store and Play Store functions these days. But then again, those purchases are meant for access to a higher functionality or upper levels inside the app, so to speak.

What Ludo Supreme does, in contrast, is label them as entry fees, which suggests a qualifying criteria. To be fair, you can still install the app without payment of any kind. So, it isn’t a paid app either.

But let’s say, for argument’s sake, that it is a paid app. Does that make it illegal? Certainly not. It merely bundles it into another category. The question of legality is connected to whether the game is operated in the same manner as a gamble.

Lady Luck or the Lass Labour

Usually, gambling takes two forms — the more fluctuating and high-stakes scenario and the less riskier and slightly more balanced scenario. The second form is often called betting. Either way, both involve putting your money into a common pool and benefiting from it depending upon the risk and quantum of your prediction/play.

Even though Indian law on gambling is rather patchy, what is and isn’t a game of skill depends on two primary things: 1) the talent of execution, and 2) the extent of manipulation.

Interestingly, while betting on horse races is thought of as a game of skill and treated as legal, cricket betting is understood as a game of chance with any related betting deemed as illegal.Technically, it depends to what degree one’s talent can modify the outcomes of a game.

Talent in this context means in-game talent and not the ability to influence it in other (questionable) ways.

Ludo Supreme — The Judgement Call

Let’s extrapolate this logic onto online Ludo, shall we? Again, remember that we are only considering the rules and format of Ludo Supreme here.

The petitioner says that if it is possible for a three-year-old child to win this game, then it is not a game of skill. First of all, there is no evidence or data (yet!) to back that claim, especially showing the frequency and age break-up of opponents playing and losing against a three-year-old in this game. (By the way, whoever these people are, seriously?!)

Secondly, what constitutes skill is not set in stone. It may fluctuate on a case-by-case basis. The litmus test here is the “preponderance of skill” as outlined in the landmark judgement KR Lakshmanan v. State of Tamil Nadu. This means a player’s decision-making and strategy are central to determining the outcome of the game.

The thrill of taking pure chances isn’t necessarily a gambling instinct. Ludo involves strategic thinking with regard to movement and positioning of one’s tokens. Adding monetary stakes could be a natural extension of sharpening those skills. Think incentivisation for better play, not greed or addictive charm.

Then there is the possibility of tampering. Almost every game of Ludo ends with one of the losers calling out (frivolously, most of the time) the rigged algorithms that selectively favour one over the other. This is a question of technical make and software design of the game and it is impossible to authenticate unless the algorithms are disclosed publicly. Those are closely guarded by the IP laws and work product doctrines.

So essentially, the preponderance of skill is high enough in online Ludo to prevent it from being called a game of mere chance.

The Rise of Online Ludo

LudoKing’s download numbers exploded throughout last year after cabin fever and lockdown syndrome led to many young Indians socialising through online gaming. Gametion Technologies, LudoKing’s parent, pocketed a revenue of $20m in 2020 and became the first gaming app to cross 100 million downloads.

Given the ease and frolic of play, the cultural association of Indians with Ludo and its distinction in the board games paraphernalia, the mercurial rise in online Ludo (as opposed to others like chess, snakes and ladders etc.) wasn’t surprising.

Despite being an unpopular opinion, it would be fair to say that the underlying “chance-factor” in some elements of the game (like rolling the dice etc.) is the feature that has managed to captivate players for generations, purely for their merriness and fun.

Having said that, a $930m gaming industry that is growing at a 41% CAGR is, perhaps, grand enough not to be stymied by the outcome involving one application like Ludo Supreme. It’s now an issue before the courts which will exercise their skill in deciding what chance Ludo Supreme holds.

(Originally published June 22nd 2021 in transfin.in)