Government releases new rules for online gaming

The government on Thursday released new rules for online gaming that prohibit any games involved in betting and wagering, and entail a framework of multiple self-regulatory organisations (SROs).

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

There will be multiple self-regulatory organisations (SROs) that 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." 

He said online games that collect money will need to complete KYC norms.

Commenting on this move, Paavan Nanda, Co-founder of WinZO Games, said, "The proposed amendment to the IT Rules, 2021 to provide a 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 added.

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While releasing final guidelines for online gaming, the minister said that the final rules are still a work in progress.

He added that private companies have submitted a model for SRO, which will be discussed with them. "Government will notify SRO. It will be an independent body. We are starting with three SROs. If there is a need for more we will go for it," Chandrasekhar said.

He added that the IT ministry will notify an entity that will flag false information posted online pertaining to the government.

"Government has decided to notify an entity through MeitY and that organisation then would be the fact checker for all aspects of content online and only those that are related to the government," Chandrasekhar said.

The MeitY (Ministry of Electronics and Information Technology) notified the amendments to the Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021, in relation to online gaming.

The All India Gaming Federation (AIGF), the apex industry body for online gaming in India, lauded MeitY for bringing regulatory clarity through online gaming rules.

Roland Landers, CEO of AIGF said, "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."

He added, "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."

Harsh Jain, Co-founder and CEO of Dream11 and Dream Sport, said, "We welcome the regulations announced by Rajeev Chandrasekhar. They will unlock the potential for our $20 billion Indian online gaming industry to significantly contribute to our Prime Minister’s vision of a trillion dollar digital economy."

(With inputs from PTI)