In order to define the parameters of national-level legislation to regulate online gaming, the Ministry of Electronics and Information Technology (MeitY) established an inter-ministerial task force. Among other things, the task force recommended creating a central regulatory body for the industry, clearly defining what games of skill and chance are, and bringing online gaming under the purview of the Prevention of Money Laundering Act, 2002.
The CEO of the government think tank Niti Aayog, as well as secretaries from the ministries of IT, home, finance, information and broadcasting, and consumer affairs, among other departments, were part of the task force that MeitY established in May 2022. It is believed that the task force prepared a final report with all of its recommendations and gave it to the IT Ministry.
Online gaming has so far been a state issue, but state governments have claimed it is very challenging to enforce certain laws, such as geo-blocking particular apps or websites within their state’s borders. The fact that laws passed in one state may not apply in another raises additional concerns and has led to inconsistent regulation of the nation’s online gaming market. Additionally, unlike the Centre, state governments do not have sufficient blocking authority to impose orders preventing access to offshore betting sites.
The proliferation of online games in the nation has drawn attention from stakeholders to a number of societal issues that may develop. People have reportedly lost significant amounts of money playing online games, which has resulted in suicides across the nation. Additionally, there is currently no regulatory framework in place to control various aspects of online gaming businesses, such as having a mechanism for handling complaints, putting in place player protection measures, safeguarding data and intellectual property rights, and forbidding deceptive advertising.
Uncertainty has resulted from the inconsistent behaviour for online gaming businesses. The government is considering creating a nodal agency that will handle all matters relating to online gaming, including the introduction of a uniform law to establish what kinds of online gaming are permitted.
A central-level law for online gaming should cover both paid and unpaid games of skill, including e-sports, online fantasy sports competitions, and card games, among others, claims a source familiar with the task force’s report. Unless they have a large user base in India or allow the publication or transmission of information in the nature of any inappropriate content, like violence, nudity, addictive content, or misleading content, casual games without a real money element in the form of stakes may be kept outside the scope of such rules.
It has also advocated the establishment of a regulatory body for the online gaming sector, which will decide what counts as a game of skill or chance, certify various gaming formats accordingly, look for compliance, and enforce rules.
Online gaming should implement a three-tier dispute resolution system, similar to that required by the Information Technology Rules, 2021 for online streaming services, that consists of a grievance redressal system at the platform level, an industry self-regulatory body, and an oversight committee chaired by the government.
Any domestic or foreign online gaming platform that provides real money online games to Indian users must be a company that has been legally established in accordance with Indian law. In accordance with the Prevention of Money Laundering Act of 2002, these platforms will also be considered “reporting entities” and be obligated to alert the Financial Intelligence Unit-India to any suspicious transactions.
