“The focus should move away from prohibitions and punitive measures. This approach to regulation would serve the interests and put greater power in the hands of different stakeholders,” Meta’s Public Policy Director Sunil Abraham said during a panel discussion on a model framework for regulating India’s online gaming sector, organised by the All India Gaming Federation (AIGF).
“It is commonly held that global platforms like Meta are hostile to regulations. While that could be true of certain start-ups from Silicon Valley many years ago, this has completely changed as far as Meta is concerned at least. Our founder (Mark Zuckerberg) has been actively inviting enlightened regulations in order to protect the rights of our users.” — Sunil Abraham
Abraham was joined by Sarika Aggarwal Synrem, Commissioner & Secretary, Government of Meghalaya; and Dr. Subi Chaturvedi, Chief Corporate Affairs and Public Policy, Inmobi; in a discussion moderated by Gowree Gokhale, Partner, Nishit Desai Associates.
“There is a very important role that self-regulatory organisations can play to make the regulatory environment future-proof. Standards developed in this bottom-up fashion can contribute both as an alternative and as supplement to regulations that are issued by central and state governments,” Abraham explained.
Gaming is a state subject under India’s federal structure which has led to different states taking different positions on gaming regulations. Some states like Karnataka have tried to ban it whereas some like Meghalaya have moved to regulate the sector. A uniform framework across the country can go a long way in providing certainty to businesses which can aid the development of the industry at large.
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What are some of the proposed measures for a framework?
Dr. Subi Chaturvedi of Inmobi said that she is “a proponent of inclusion, a proponent of not erring on the side of caution.” She added that there are three ways to “measure and test good regulations”:
- Is there someone who’s your single point of contact? Is there an authority for redressal?
- Is there someone looking at consumer interests, making sure that rights are balanced along with industry interests and innovation?
- What is this regulation doing to the industry? Do you see proliferation or do you see this killing innovation?
View gaming as a sunrise sector: “The industry is seeking to not just be a cash cow in the eyes of the government. My pain point is when we look at gaming, we’re always looking at the stick first and then the carrots. I know there will always be bad actors. So what we often tend to miss out is regulation is an afterthought or it is done to create a framework so that you don’t colour outside the lines. These are people (entrepreneurs) who are constantly pushing the boundaries of innovation. So when we look at curtailing innovation in industries, what we’re saying is saying no to opportunities. We’re saying no to claiming a rightful place under the sun. The state should see this as a sunrise sector, incentivize the presence of innovators, just like we did by offering support to IT parks,” Chaturvedi proposed.
Donate a part of earnings to promote sports: “Some countries have a framework where they say that some of this money that companies earn as revenue or profits needs to go to sports building, sports centres or some other social needs. We may want to look at something like that for India which gives the message that we care because this industry is perceived as someone who is going to create some issues in the social fabric unfortunately,” Gokhale recommended.
Ensure speedy grievance redressal: “I find that it (swift resolution) is extremely important because that creates the faith in the system for the players if they see their redressal is speedy because there is so much backlog in India,” Gokhale revealed. She also said that decriminalisation was important for a dynamic regulatory system. “The statute creates unnecessary penalties. We are also talking about decriminalisation under the Legal Methodology Act.”
- Codify it in the letter of law: “We have seen many regulations where turnaround time is imposed upon regulated entities without a similar reverse obligation on the regulator. It is fantastic that similar practices are emerging and being codified in the letter of law,” Abraham said while referring to Meghalaya’s regulatory framework for online gaming.
Distinguish between games of skill and chance: Chaturvedi said that a lot of governments have shied away from stipulating what is a game of skill and a game of chance. “There’s a fairly clear understanding, and there are bright-line tests that help you determine that this is a game of skill. There are different categories of gaming, and all of that gets bunched under one umbrella. This is why we need a forward-looking engagement. We should not have a five-year entry barrier because many of these startups are new. I would look at an entry barrier of three years,” Chaturvedi explained.
- Ensure the right to be heard: “The right to be heard is being woven into the core of the regulatory mechanisms. It should also be part of the consultative processes where one can expect the government to apply their minds and provide reasons for why certain submissions were not accepted or were accepted,” Abraham proposed.
Picking up cues from Meghalaya’s gaming law
Synrem said that the government drafted the legislation, Meghalaya Regulation of Gaming Act, 2021, after several discussions and examining other laws prevailing in the country. The state’s legislation not only covers skill-based gaming but also covers games of chance.
“We thought it prudent to regulate rather than totally prohibit so that we give space to all the stakeholders with good intentions to come together and grow together and at the same time act against the dubious players who are taking our people for a ride.” — Sarika Aggarwal Synrem, Government of Meghalaya
Here are some of the measures which states can refer to while regulating online gaming:
- Establish Gaming Commission: “It would be chaired by a retired judge of the High Court, we would have one member from the industry with experience of few years in the gaming industry and another person from a civil society organisation to help us hear concerns of the local population. It would act as a dispute redressal body between players and the operators. They would not need to go to the court of law where they will have to face a lengthy trial. We thought that we need to have a body which can look at speedy redressal of disputes without government intervention. They will be giving us policy directions on how we need to move about in the sector,” Synrem averred.
- Light-touch framework: “It’s a very comprehensive and broad based legislation framework. We’ve tried to draft a light-touch framework. The onus of complying with various laws of the land is on the licensee. We have a lot of provisions for players that they need to have a responsible charter displayed at all times whether on physical premises and online gaming websites,” she disclosed.
- Proactive communication: “We will give them (operators) an opportunity to be heard in case an application is rejected or we intend to cancel their licence. It’s not that they have to knock on the doors of the government to seek an opportunity but it’s incorporated in the law so that it becomes their right before their application is rejected or their licence is cancelled on any grounds,” Synrem explained.
- Clear timelines: “We have laid down the process with a clear timeline that is different from other legislations because governments are not able to give timelines to certain tasks which are supposed to be done. We kept the licensee or the operator in mind. We will be issuing a provisional licence to them which will be valid for six months. The fees for it will be very negligible. We’ve already issued three provisional licences to three applications within a span of one month,” she informed the gathering.
- No gaming establishments around educational or religious institutions: “No gaming premises can come up within the vicinity (100 metres) of educational and worship institutions keeping the interest of the local population in mind,” Synrem remarked.
- Separate window for charitable organisations: “We’ve also thought about charitable organisations which organise fundraising events around these games of skill and chance. We have a separate chapter for them so that the licence fee is not too much for them. We have a temporary licence that would be issued to them for minimal fees,” Synrem said in conclusion.
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