Online Gaming Industry means the industry comprised of businesses engaged in operating, or providing services to, online casinos. Formally referred to as interactive entertainment, but now is the economic sector involved with the development, marketing and sale of video and computer games to millions of people worldwide.
Articles related to Online Gaming Rules –
- The focal ministry for issues relating to online gaming is the Ministry of Electronics and IT (MeitY).
- Gambling and betting are considered state matters, according to the Department of Legal Affairs.
- E-sports and traditional sports in the nation have recently received recognition from the central government.
An Inter-ministerial Task Force (IMTF) was set by Government of India up to explore new regulations for online gaming.
- It demanded that the Public Gambling Act of 1867, which currently regulates it and is unable to cover, protect against, or cope with digital-based activities and the accompanying new technology, be repealed.
- The Public Gambling Act (PGA), a statute from the pre-internet age, serves as a model law that state governments are free to follow or not.
- To promote economic development and innovation in the online gaming sector, NITI Aayog supported a federal law. It demanded the creation of a legal framework to swiftly handle complaints from internet gamblers concerning financial issues.
Potential of Gaming Industry : The gaming industry’s potential The Indian mobile gaming market is predicted to generate more than $1.5 billion in revenue in 2022 and $5 billion by 2025.
- Between 2017 and 2020, the industry expanded at a CAGR (compound annual growth rate) of 38% in India, compared to 8% in China and 10% in the US.
By 2024, it is anticipated to expand at a CAGR of 15% and generate Rs 153 billion in sales.
Legislation regulating online gaming is needed-
Bring Uniformity: Despite the Supreme Court’s recognition of the fundamental right to trade for games of skill, some state governments have sought to outlaw both skill and chance games while others have followed the Public Gambling Act and permitted real money skill games.
- To deal with offshore illicit gambling sites, there is no centralised law.
- Online gaming platforms must not enable money laundering, financing of terrorism, transactions that violate the Foreign Exchange Management Act, or other illegal acts, nor must they encourage or facilitate transactions using unauthorised payment systems.
State law problems: State laws do not have a unified regulatory strategy for internet gaming.
Health Consequences: In 2019, the World Health Organization classified “gaming disorder” as a type of behavioural addiction.
The harms experienced by the children who are impacted by the disease were described by the National Commission for Protection of Child Rights in 2021.
Significance of Draft Rules for Online Gaming-
Regulation: As a first step toward comprehensive regulation of online gambling, the All India Gaming Federation (AIGF) welcomed the draught legislation.
Hopefully, it would lessen the state-by-state regulatory fragmentation that has been a significant obstacle for the sector.
Protection: Even though regulations will raise the expense of compliance, they will be able to grow responsibly without worrying about repeated state prohibitions.
Promote local businesses: This might harm international betting organisations while helping Indian fantasy sports and other gaming businesses grow.
Some highlights of draft online gaming rules –
Aim: Protecting players from any potential harm caused by skill-based games.
Purpose: To regulate online gambling platforms as middlemen and subject them to due diligence standards. To promote the online gaming industry and foster innovation
According to the definition of an online game : A user can access an online game through a computer resource and play it if they make a deposit in the hopes of winning money.
Games of Skill : It allows only ‘games of skill’ to operate legally in India. In India, the term “games of skill” has been used to describe a variety of video games, including rummy and the online fantasy sports game Dream11.
Coverage : The law will apply to games involving real money or a deposit of any amount. However, it is made clear in the guidelines that this does not apply to activities that fall under the purview of state gaming laws.
Self-regulatory mechanism : Self-regulatory bodies would be associated with the ministry.
Composition of self-regulatory body : The self-regulatory agency will have a board of directors consisting of five individuals from a variety of expertise, including online gaming, public policy, information technology, psychology, and medicine.
- All online gaming businesses will need to register with the self-regulatory organisation, which will determine what steps need to be followed in accordance with the regulations.
- A self-regulatory body will make sure that none of the registered games contain anything “which is not in the interest of the sovereignty and integrity of India, defence of India, security of the state, friendly relations with foreign states, or public order, or incites the commission of any cognizable offence related to the aforesaid.”
Content Regulation : Government may also control game content to guarantee that there is no violent, addicting, or sexually explicit material in online games. It is estimated that between 40 and 45 percent of Indian gamers are female, making it even more crucial to maintain the security of the gaming industry.
Responsibilities of Gaming Firms : Gaming companies must perform due diligence, which includes disclosing the steps used to protect user deposits and warning users about the dangers of financial loss and addiction that come with playing online games.
- User authentication, clear money withdrawals and refunds, and an equitable distribution of prizes.
- They must adhere to the KYC regulations established for entities under Reserve Bank of India regulation (RBI).
A compliance officer is appointed: to make sure the gaming platform complies with the rules. The nodal officer will serve as a grievance officer who will handle user concerns as well as a contact with the government and law enforcement.
Registration mark : Online games must display the self-regulatory body’s registration mark, which was issued by that organisation. Only businesses that purchase the mark will be permitted to run ads on websites like Facebook and Google.Protection to Gaming Firms : Gaming firms are protected by the safe harbour provisions described in Section 79 of the IT Act when they follow the rules in the IT Rules. These regulations shield intermediaries from legal action in the event that third parties abuse the sites.
With Regards,
Team DC (ADARSH PANDIT)
