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Indian Government To Launch An Online Gaming Regulatory Body

The Government of India has proposed an online gaming regulatory body, which will be a panel composed of Prime Minister Narendra Modi’s top bureaucrats. The panel will recommend the implementation of a regulatory body to govern online gaming in the country. They will also issue a highly anticipated report that will shape the future of the online gaming industry in the country.

The panel will include top bureaucrats, such as the heads of the revenue and sports ministries. The panel has suggested the creation of a regulatory body that will classify online games based on skill or chance. This will finally help solve the endless debate that has been bothering in the online gaming industry. 

The draft report will also include the introduction of rules to ban the prohibited formats of games and take stricter action on gambling websites. The panel members have been working on the draft of online gaming sector regulations for months. The highly awaited report is said to be a deciding factor for the future of the mobile gaming industry in the country. 

In recent times, state governments of Tamil Nadu and Kerala have been actively banning games such as rummy and others. The draft report which comes at such a time will bring in more clarity where online gaming and online gambling apps are under increased scrutiny. 

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The report notes that state governments find it ‘difficult to implement and monitor geo-fencing measures,’ and thus are unable to ensure that the users in their region are accessing illegal forms of gambling or gaming.

Highlights of the proposed draft:

• The report states that the central government must consider enacting a discrete law to regulate online gaming as a ‘long-term measure.’ The formulation and enactment of the new law will take time, but till then, the industry can be regulated by the rules drafted under India’s existing IT laws.
• All online games, excluding e-sports and games of chance, would fall under the Union IT Ministry.
• The rules proposed by the body should apply to both real money games and free games of skill, including e-sports, online fantasy sports, card games, and such casual games that may impose serious impact.
• Indian gaming companies as well as companies operating outside the country targeting Indian audiences would come under the ambit of new rules.
• The report supports the creation of a regulatory body for the industry. The body will also inspect what qualifies as a game of skill and certify various gaming formats.
• Recommending the incorporation of provisions for a ‘Code of Ethics’ for the gaming publishers. It also recommends having due diligence of online gaming platforms, consisting of a powerful grievance redressal mechanism as well as binding know-your-customer (KYC) norms.
• Any online platform offering real-money games to Indian users should have a legal entity formed under the Indian law. It also recommended that the government will have blocking powers against unregistered online gaming platforms.
• The report suggests a three-tier dispute resolution mechanism; self-regulatory organizations of gaming platforms and an oversight committee led by an applicable Ministry.

Finally, the IT Ministry will conclude the report on receipt of further comments from panel members. The draft report will then be sent to the cabinet secretariat for approval. However, no timeline has been fixed for the entire process and finalization.

India’s online gaming industry stands at $1.5 billion this year, and is expected to reach $5 billion by 2025. Foreign investors like Tiger Global and Sequoia Capital have heavily backed gaming startups that are known for their fantasy sports offerings such as Dream11 and Mobile Premier League.’ Investment in the sector saw a massive flow of over 1.7 billion USD in the last 17 months, with the rise of 400 online gaming startups in India. The country is also witnessing a rise in employment opportunities within the online gaming job market. 

Amidst the growing concerns over games causing addiction and ‘inconsistent state laws’ disrupting business, the growth of the industry cannot be overlooked. Additionally, the gaming industry also continues to lack the need of the central government’s guidelines for online gaming and a central body to monitor the space. 

A panel comprised of Prime Minister Narendra Modi’s top bureaucrats recommended the implementation of a regulatory body governing online gaming in a much-awaited report which will shape the future of the gaming industry in the country.

— Asia Gaming Brief (@agbrief) September 20, 2022

Online skill gaming cannot be considered as gambling only because it involves a subscription-led or involving an entry fee. According to the judgments given by various courts, ‘games of skill’ are legitimate business activities shielded under Article 19(1)(g) of the Indian Constitution as they do not fall under the purview of ‘gambling.’. 

Last month, a group of ministers met industry bodies and leading operators from the online gaming space and discussed the valuation approach for GST on online gaming. The meetings attempted to understand the difference between online skill gaming and betting and gambling.

Looking at the unprecedented growth of the industry so far, a well-defined regulatory framework will play a huge role in its growth in the coming times. Progressive steps to effectively regulate this sector is the need of the hour. 

For more news and updates, keep reading Gutshot Magazine. Follow us on our social handles Facebook, Twitter, Instagram, and Telegram.

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