Paytm returns hours after Play Store exit over alleged policy violation

Paytm, one of the largest payments apps in India, found itself in the midst of an unusual controversy on Friday, when Google Play Store removed the app for allegedly violating its policy on sports betting, only to restore it hours later. However, Paytm’s digital gaming platform, First Games, was still missing from Play Store.

“Paytm App is back, live on Play Store,” Paytm founder Vijay Shekhar Sharma tweeted late Friday evening. “We launched a UPI cashback campaign this morning. Our app got suspended by Google for this. India, you decide if giving cash back is gambling.”

Earlier in the day, Google India said in a blog post that it did not allow online casinos or support any unregulated gambling apps that facilitated sports betting. “This (policy) includes if an app leads consumers to an external website that allows them to participate in paid tournaments to win real money or cash prizes, it is a violation of our policies,” it said quoting Suzanne Frey, vice president (product, Android security and privacy). It, however, did not mention Paytm or Paytm First Games.

The internet major’s move seems to be critical, especially at a time when the sporting community is eagerly waiting for the resumption of the Indian Premium League (IPL) on Saturday after months of uncertainty owing to the Covid-19 pandemic. This year, Dream11, a popular fantasy gaming company, which recently became a unicorn, is the title sponsor of the tournament. The IPL has been one of the most popular platforms for fantasy game companies to expand their user base.

Industry experts say Google’s move has brought to the fore two main tech policy issues — the firm’s dominant position as an application marketplace, and the legal clarity on online sports betting.

“Online gaming is a grey area. If the game of skill is higher, then it is legal. It is illegal if the game of chance is higher. However, there is no judgment from the Supreme Court with regard to online games involving sports betting, and hence there is no pan-Indian judgment. High court judgments apply only to states in which they operate,” said Salman Waris, managing partner at TechLegis Advocates and Solicitors. He also said one could not rule out that the latest move was due to a heated competition between Paytm and Google Pay.

Paytm’s Sharma in a television interview earlier in the day alleged that now foreign companies were stifling the prospects of Indian app companies. He also accused Google of acting like the judge, jury, and executioner in this case. Google could not be reached for its reaction.

Separately in a blog post, the company said it launched ‘Paytm Cricket League’ on its app for users to engage in their passion of cricket and get cashback. The game allows users to get player stickers after each transaction, collect them, and receive Paytm cashback. However, it received a communication from Google that the Paytm app was being suspended due to violation of Play Store policies on gambling. “While it is clear that all activities on Paytm are completely lawful, we have temporarily removed the cashback component in an effort to meet the Play Store policy requirements. We continue to work with Google to restore the app,” the company added.

Paytm, which is backed by Chinese investment giant Alibaba, also operates fantasy gaming and animated games under Paytm First Games. The platform currently has 80 million users. Last month, Ant Group (an Alibaba affiliate) in its Hong Kong stock exchange prospectus had said the firm had ‘significant influence’ over Paytm’s parent, One97 Communications.

Earlier this week, Paytm roped in former cricket star Sachin Tendulkar as its brand ambassador, apart from earmarking ~300 crore in promotion and investment for its fantasy sports in the ongoing financial year.

Even though sports betting is considered illegal in the country, a 2017 judgment by the Punjab and Haryana High Court had ruled that playing fantasy game involved superior knowledge, judgment and attention. The court also had held that ‘the element of skill’ had a predominant influence on the outcome of such games. This judgment was later upheld by the Bombay High Court.

In a separate statement issued on Friday, the Federation of Indian Fantasy Sports (FIFS), the apex body of such companies, thanked Google for strictly adhering to its policies and safeguarding the interest of all fantasy sports operators. “We are happy to see such strong moves by Google to re-establish a level playing field by removing any app that violates its policies,” it said.

FIFS counts Dream11, MyTeam11, and My11Circle, among others, as its members. All these companies directly compete with Paytm Games.