Govt notifies rules for online gaming, to appoint multiple self-regulatory organisations

The government on Thursday released new rules for online gaming, which prohibit any game that involves betting and wagering, and entail a framework of multiple self-regulatory organisations (SROs) to determine whether a real-money game is permitted or not.

Online games involved in wagering or betting will fall foul of new online gaming rules, Minister of State for IT Rajeev Chandrasekhar told reporters in New Delhi.

MeitY will allow multiple SROs to determine whether a real-money game is permitted or not.

‘Online real money game’ means an online game where a user makes a deposit in cash or kind with the expectation of earning winnings on that deposit.

There will be multiple SROs, and these SROs will have participation from all the stakeholders including but not limited to the industry. "We are dealing with a framework which allows for all online gaming to be determined as permissible or not, by an SRO and there will be multiple SROs," Chandrasekhar said.

Permissibility will be determined with the simple principle of whether wagering is involved and "if wagering is involved, the SRO will be in a position to say that those online games are not permissible".

Chandrasekhar explained that while online gaming presented a huge opportunity for startups, there had been an ambiguity around what was permissible, which the new rules aimed to address.

Welcoming the new online gaming roles, Roland Landers, CEO, All India Gaming Federation, said: “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 Prime Minister. 

“The notification of MeitY rules marks a pivotal moment for the online gaming industry in India. It is expected to put an end to the ambiguities that the industry was grappling with and lay the foundation for sustainable and responsible growth of the industry. India’s online gaming industry has already attracted $2.5 billion in FDI and we are hopeful that this will propel the industry to great heights and encourage innovation. We look forward to engaging with MeitY to seek requisite clarifications as our members initiate the compliance process," said Joy Bhattacharjya, Director-General, Federation of Indian Fantasy Sports.

Under the rules, the SROs (three SROs will be notified to begin with) will have to publish a framework to safeguard users against the risk of gaming addiction, financial loss and financial fraud on its website.

The framework should include repeated warning messages at higher frequency beyond a reasonable duration for a gaming session and provision to enable a user to exclude himself upon user-defined limits being reached for time or money spent.

Mobile Premier League (MPL) described the release of the new online gaming rules as a watershed moment for the industry ''as it recognises online gaming intermediaries and distinguishes them from gambling''.

''The rules will go a long way in helping us realise our PM's vision for India to become a global leader in gaming and also contribute to the continued success of Brand India and Create in India,'' Sai Srinivas, CEO and Co-Founder of MPL, told PTI.

The uniform legal framework provided by these rules will boost investor confidence.

''We anticipate that this will also help reduce regulatory fragmentation at the state level as also mentioned by the Hon'ble Minister, create a more stable business environment and weed out gambling platforms,'' MPL's Srinivas said.

He said that with the transition to the self-regulatory model that will be recognised by MeitY, MPL looks forward to working collaboratively with industry peers and other stakeholders.

''We believe that this effort will help to create a sustainable and thriving gaming ecosystem in India,'' Srinivas said.

Paavan Nanda, Co-Founder of WinZO games said the central, light-touch regulatory mechanism, is a game-changer for the world's largest gaming market, India.

''The overall recognition of Online Games of Skill by way of inclusion as the third form of intermediary after Social Media, and content-related publishers/OTT players, is beneficial for GST differentiation from gambling, providing the required stability of regulation, and facilitating a level playing field for all games of skill,'' Nanda said.

Malay Kumar Shukla, Secretary, E-Gaming Federation said the rules will play a pivotal role in bringing transparency, ensuring player protection, attracting investment, boosting investor confidence, and creating job opportunities.

''We are grateful to the government for recognising the sector's long-standing need of bringing about regulatory clarity by prioritising and notifying the regulations,'' Shukla said.

The broad guidelines regarding betting and wagering will safeguard players and industry at large by distinguishing legitimate skill gaming operators from illegitimate and unauthorised betting and gambling operators.

With inputs from PTI