Industry insiders and legal experts weigh in on whether the Ministry of Electronics and IT's draft guidelines for online gambling, which include a self-regulatory organization a grievance redressal mechanism, and required know-your-customer (KYC) criteria for verification, will be successful.
The Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021, have been modified by the ministry to include online gaming. The modifications, which have been made available for public comment, reportedly stipulate that all online games must register with a self-regulatory organization that has been authorized by the Ministry.
The regulations state that only games that have been authorized by the organization may be played lawfully in India. These laws seek to safeguard.
"The criteria are straightforward — we would like the online gaming ecosystem to thrive and grow; and be a key catalyst to India's $1 trillion digital economy objective by 2025-26," said Rajeev Chandrasekhar, Minister of State for Electronics and IT. Additionally, we see start-ups playing a growing part in the online gaming sector.
The minister added that the ministry framed the policy fast, which was made possible by IT holding numerous stakeholder engagements before crafting the policy. He added that the ministry would shortly conduct a fresh round of public hearings to finalize the policy.
Inside Perspectives
Srinivasan, Co-Founder and CEO of MPL and one of the industry insiders, told News18: "We applaud the introduction of the draft guidelines, which brings online gaming under the unified central control. We are very appreciative and the ministers in particular for quickly bringing such intelligent and well-balanced rules that strike a balance between the speed of innovation and the welfare of gamers.
He also thinks that these regulations are "a tribute to our industry," where everyone put in a lot of effort to cooperate with the government, put in place user safeguards, and ask for uniform regulation.
The MPL Co-founder added that the regulations will support the expansion of "Create in India and Brand India" and PM Narendra Modi's aim for India to be a global leader in online gaming.
The proposed regime for online gaming, she noted, "appears to be quite nuanced and will require numerous compliance actions to be taken by online gaming platforms. For online gambling platforms to implement compliance with the new system, a three-month lead period is suggested.
She also said while several compliance requirements proposed for online gaming intermediaries appear to be similar to those applicable to social media intermediaries (general due diligence, appointment of a grievance officer, a compliance officer and a nodal contact officer); several additional due diligence and other compliance measures are proposed for online gaming platforms.
The proposed regulations, for instance, will mandate that each online game supplied by an online gaming platform register with a self-regulatory organization, display the registration mark on the relevant online game, follow the KYC procedure for user accounts, and issue each game with a no-bot certificate.
The Ministry is authorized to declare any other internet-based game to be classified as "online game" and brought within the scope of the amended IT Rules, even if no deposit from users is required. "Online game" has been defined within the purview of the proposed rules to refer to online games where users make a deposit to participate. However, compared to other proposals, the overall regime for online gaming appears to be substantially more complicated.
The proposed self-regulation code put up for online gaming in India, according to Raja Prakash, Managing Partner at Athena Legal, is a move in the right direction and will promote orderly expansion of the already thriving sector.
Overall regulations for online gaming under the IT Act will increase the cost of compliance for the industry, he acknowledged, but they also deliver much-needed regulatory stability and help filter out dishonest players.
According to Gamer founder and CEO Sat yam Rastogi, the regulations will enable online gaming companies to self-regulate.
We strive to appropriately uphold the vital responsibility of self-regulating our companies. The ideas of responsible gaming will now be even more deeply ingrained in the sector, separating the good from the bad.
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