The Ministry of Electronics and Information Technology (MeitY) has announced the final rules for online gaming, which come after draft regulations were issued in January 2023. The development comes after Minister of State for Electronics and Information Technology, Rajeev Chandrasekhar, recently stated that the rules were being scrutinized after "extensive consultation" and would be notified soon. The aim of these rules 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.
The new rules define an "online game" as "a game that is offered on the internet and is accessible by a user through a computer resource or an intermediary." As per the final rules, the government will appoint multiple self-regulatory organizations (SROs) comprising industry representatives, educationists, and other experts such as child experts, psychology experts, and so on. To begin with, the government will notify three SROs.
SROs will be responsible for declaring online games permissible on the basis of whether games allow wagers. The SRO can declare online real money games as permissible if it is satisfied that "the online real money game does not involve wagering on any outcome." The new rules for online gaming prohibit any game that involves betting and wagering. Permissibility will be determined with the simple principle of whether wagering is involved. "We are only regulating real money games that involve wagering. By process of exclusion, all other kinds of games will be permissible," MoS IT Rajeev Chandrasekhar said, addressing the media.
Apart from the SRO, the IT ministry has also notified a mandatory KYC verification of online gamers of games involving real money. Under the new rules, MEITY will also notify agencies to fact-check false and misleading information related to government business.
"The release of the new online gaming rules is a watershed moment for the industry, as it recognizes online gaming intermediaries and distinguishes them from gambling. The rules will go a long way in helping us realize our honourable 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. 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 honorable minister, create a more stable business environment and weed out gambling platforms," said Sai Srinivas, CEO and co-founder, MPL.
"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 catalyzing 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," said Deepak Gullapalli, Founder & CEO, Head Digital Works (A23).
In conclusion, the new rules for online gaming in India aim to provide a uniform legal framework, boost investor confidence, reduce regulatory fragmentation, and weed out gambling platforms. SROs will be appointed to regulate the online gaming industry and ensure that the necessary guardrails are in place to safeguard the users. The rules will also mandate a KYC verification of online gamers of games involving
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