Online Gaming Policy Draft: The Ministry of Electronics and IT has released Draft Rules for Online Gaming Policy, an amendment to the Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021. (MeitY). These proposed rules aim to regulate the Indian online gaming industry and offer gamers a safe and moral gaming environment.
The Online Gaming Policy Draft Rules: A Summary
Self-Regulatory Body: Online gaming companies in India would be required to register with a self-regulatory body. Only games that have been authorised by this organisation will be permitted to operate legally in the country. The self-regulatory agency’s board will be comprised of five directors from a range of fields, including online gaming, public policy, IT, psychology, and medicine. In the event that there are many self-regulatory organisations, each one is required to inform the government of the games it has approved for registration and to provide a report describing the prerequisites.
Compliance: Just like social media and e-commerce companies, online gaming platforms will also need to name a compliance officer to ensure that they are abiding by all applicable laws and standards. They must also select a nodal person to function as a point of contact for the government and assist law enforcement, as well as a grievance officer to deal with customer complaints.
Due Diligence: Additional due diligence measures will also be required from online gambling organisations, including KYC (know your customer) user checks, transparent withdrawal, and refund policies, and equitable winning payouts. These companies must follow the requirements for KYC checks set forth by the Reserve Bank of India (RBI).
Random Number Generation Certificate and No Bot Certificate: A Random Number Generation Certificate, which is frequently utilised by card game platforms to confirm that game outputs are random and unexpected, will be needed by gaming enterprises. Additionally, they will demand a “no bot certificate” attesting to the absence of bots or automated processes on the platform from a respected certifying organisation.
Restrictions on Betting: Online gaming companies will not be permitted to accept bets on game outcomes.
Reasons for Introducing the Online Gaming Policy Rules
Growing Industry: It is predicted that by 2025, the Indian mobile gaming market would bring in $5 billion. India’s industry grew at a compound annual growth rate (CAGR) of 38% between 2017 and 2020 as opposed to 8% in China and 10% in the US. According to research from the venture capital firms Sequoia and BCG, the market would continue to grow at a CAGR of 15% and bring in INR 153 billion in sales by 2024.
Protection of Female Gamers: Given that between 40 and 45 percent of Indian gamers are female, ensuring their safety is essential. These rules’ implementation is seen as a step in the right way toward the complete regulation of the Indian online gaming industry.
Reducing Regulatory Fragmentation: Historically, the Indian online gambling industry has struggled with regulatory fragmentation at the state level, which makes efficient operations challenging. The publication of these new rules is anticipated to reduce this fragmentation and provide the sector with a more uniform regulatory framework.
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