Industry lauds amendments to online gaming rules

Reaffirming its commitment to protect the safety and trust of the Digital Nagriks, the Ministry of Electronics and IT (MeitY), Government of India, has notified amendments to the Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021, related to online gaming and spread of false and misleading information regarding government business.

The aim of these amendments is to enforce greater due diligence by online gaming and social media intermediaries in respect of online games and fake or false misleading information related to Government business.

These amendments layout a comprehensive framework for Online Gaming Eco-system and also deals with fact checking related to online content pertaining to Government

These rules address the twin challenges of catalysing and expanding online gaming innovation and at the same time protecting citizens from illegal betting and wagering online. Rules will be catalyst for expanding innovation, while banning/ prohibiting wagering on outcome of games and betting.

Online gaming is a multi-billion opportunity for Indian start-ups and an important part of PM Narendra Modi’s vision of IndiaTechade and $1 trillion digital economy.

Online gaming start-ups and innovation are being powered by young Indians across the country and these rules will provide clarity and certainty in terms of policy framework for them.

The rules will ensure that online games or sites that involve wagering will be banned completely, including advertising or any time of presence.

Industry participating SROs will be core of the enabling framework, which will certify permissible online games. Stakeholder participative SROs will determine permissible online games. The safety of gamers, including children will be addressed.

Under the rules, MEITY to also notify agency to fact check false and misleading information related to Government business.

Elaborating on the new rules at a press conference, Union Minister of State for Electronics and Information Technology, Rajeev Chandrasekhar, said, “It is Prime Minister Shri Narendra Modi’s vision and goal that young Indians get every opportunity possible to create start-ups and innovate for the world. Online gaming is certainly a huge opportunity for India and Young Indians. We see the Indian online gaming ecosystem to expand and grow into a multi-billion dollar industry and be an important catalyst to India’s One trillion-dollar Digital economy goal by 2025-26, with very clear restrictions on online wagering and betting.”

These amendments have been drafted after holding widespread consultations with multiple stakeholders including parents, school teachers, academics, students, gamers and gaming industry associations, child rights bodies, etc.

The Ministry of Electronics and IT (MeitY) was allocated the matter related to online gaming rules on December 23 last year under the Government of India (Allocation of Business Rules), 1961. The Ministry, within a fortnight, prepared the draft amendments to the IT rules and uploaded them for consultations on January 2, 2023. Meetings were held with stakeholders on January 11 and 17, and February 16, 2023.

1. As per the amended rules, it has been made obligatory on the part of intermediaries to make reasonable effort to not host, publish or share any online game that can cause the user harm, or that has not been verified as a permissible online game by an online gaming self-regulatory body/bodies designated by the Central Government.

The intermediary will also have to ensure that no advertisement or surrogate advertisement or promotion of an online game that is not a permissible online game, is hosted on its platform.

2. The self-regulatory body will have the authority to inquire and satisfy itself that the online game does not involve wagering on any outcome, that the online gaming intermediary and the game complies with the rules, the requirements under law for being competent to enter into a contract (currently at 18 years), and a framework made by the self-regulatory body regarding safeguards against user harm, including psychological harm, measures to safeguard through parental controls, age-rating mechanism, and measures to safeguard users against the risk of gaming addiction.
3. The amended rules also cast additional obligations on online gaming intermediaries in relation to online games involving real money. These include the displaying of a mark of verification by the self-regulatory body on such games; informing their users of the policy for withdrawal or refund of deposit, manner of determination and distribution of winnings, fees and other charges payable; obtaining the KYC details of the users; and not giving credit or enabling financing by third parties to the users.

If in case the Central Government issues a notification in the interest of users or other specified grounds, the same rules and obligations will be made applicable to even those games where the user is not required to make any deposit for winnings.

4. The Government may notify multiple self-regulatory bodies, which shall be representative of online gaming industry but it will function at arm’s length from their members, and a Board consisting of Directors who are free from conflict of interest and represent all relevant stakeholders and experts, including online games users, educationists, psychology or mental health experts, ICT experts, persons with child rights protection experience and individuals having experience in relevant fields of public policy and administration.

The rules provide for the obligations to become applicable once sufficient number of self-regulatory bodies have been designated, so that the online gaming industry has adequate time to comply with its obligations.

5. The amended rules now also make it obligatory on the intermediaries to not to publish, share or host fake, false or misleading information in respect of any business of the Central Government.

These fake, false or misleading information will identified by the notified Fact Check Unit of the Central Government. it is to be noted that the existing IT rules already required the intermediaries to make reasonable efforts to not host, publish or share any information which is patently false and untrue or misleading in nature.

6. The rules already cast an obligation on intermediaries to make reasonable efforts to not host, publish or share any information which is patently false and untrue or misleading in nature.

Industry Speak

Dr Subi Chaturvedi, Global SVP, Chief Corporate Affairs and Public Policy officer, InMobi Group:

“The Ministry of Electronics and Information Technology’s announcement of the Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021 for online gaming is a significant milestone for the online gaming industry in India. It provides regulatory clarity, acknowledging the long-standing demands of gamers and industry professionals.

The new guidelines will promote innovation, boost Create in India and Brand India, and give the much-needed impetus to India’s Techade. It will ensure the responsible and transparent growth of the industry, safeguarding consumer interests while curbing the proliferation of illegal offshore gambling sites.

We commend the government’s open and transparent approach towards evidence-based policymaking, and its engagement with various stakeholders across the online gaming ecosystem. It is a decisive step towards creating a better future for the online gaming industry in India, supporting the growth of a $1 trillion digital Indian economy.

We believe that this regulatory clarity will be a game-changer for the industry and are excited to see the positive impact it will have on the online gaming industry in India through regulatory certainty, investor confidence bringing FDI and tremendous job creation. We look forward to working with the government and industry stakeholders to build a thriving ecosystem for online gaming in India and unlocking the $8-billion global opportunity for India.”

Deepak Gullapalli, Founder & CEO, Head Digital Works (A23):

“In my opinion, the announcement of new rules by MeitY for online real money games is a positive turning point for our industry. The clear definition of real-money and permissible games will be crucial in catalysing the growth of legitimate industry players. This framework will allow us to innovate and operate freely while ensuring that the necessary guardrails are in place to safeguard the users.

Overall, this is the best possible framework and the way ahead for online gaming firms in India. With the newly established clarity, the sector will regain positive investor interest furthering its growth and parallelly driving new career and economic opportunities. We look forward to working with the government to continue to promote responsible gaming and create a thriving and innovative sector that contributes to India’s digital economy.”

Roland Landers, CEO, All India Gaming Federation:

“As the oldest, largest, and most diverse industry association for online gaming in the country, we are grateful to MeitY for notifying the amendments to regulate online gaming under the Indian Information Technology Act, and acknowledging the long-standing demand of the gamers and the online gaming industry. We believe this is a decisive first step for comprehensive regulation for online gaming and, will propel the industry to compete globally, as envisioned by the Hon’ble Prime Minister. We are especially grateful that the Government recognised the industry demands and provided light touch, but comprehensive regulations, which will support innovation, boost Create in India and Brand India, and propel India’s Techade.

These rules will go a long way in promoting consumer interest while helping the industry grow responsibly and transparently and will also help in curbing the menace of anti-national and illegal offshore gambling sites, which have been proliferating in the last few years.

We look forward to assisting the industry transition to the self-regulatory model envisioned under the rules and use learnings from the years of work that has been undertaken at the All India Skill Games Council (AIGSC), the oldest and largest voluntary self-regulatory body for online gaming.

The Government has maintained a very open and transparent approach throughout this process and heard various stakeholders across the online gaming eco-system, since May 2022. At AIGF are committed to continue our engagement and provide complete support to the government in making online gaming a cornerstone of $1 trillion digital Indian economy.”

Ranjana Adhikari, Partner, IndusLaw:

“The online gaming rules notified today by MeitY are a positive step in the right direction and put the central government in the driver’s seat for online gaming regulation. The central government needs to be lauded for prioritising the regulation of this sunrise industry and recognising the importance of its contribution to India’s digital economy. The light-touch approach and the self-regulatory mechanism proposed by the central government is progressive and keeps the law nimble for a fast-paced and evolving industry.

We need to come to terms with the natural flow of globalisation and the pace of technological evolution and give up the inertia of traditional ways of law making and government's micro-oversight through statutory bodies. Law making needs to be democratised and trust needs to be built between the government and the industries. The approach taken by the central government in these online gaming rules also sets a positive precedent and delineates the right principles for the upcoming Digital India Act to emulate.”