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Why is the online gaming industry batting for co-regulatory framework?

Many stakeholders from the online gaming industry batted for co-regulation, along the lines of the model in place for the OTT (over-the-top) industry under the Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021, at a recent meeting with the Union Minister of State for Electronics and Information Technology Rajeev Chandrasekhar, as per sources who attended the meeting. The sources spoke to MediaNama anonymously because they were not authorised to speak to the media.

The meeting was attended by nearly 40 people including MeitY officials. Major gaming companies like Dream11, MPL, Games24x7, Nazara, among others, were present at the meeting. There were also representatives from gaming associations and Web3 start-ups. The stakeholders conveyed that they sought a soft-touch regulatory framework because online gaming was a sunrise industry and regulations needed to “foster innovation”, as per the source.

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What is the model under the IT Rules, 2021: There is a three-stage grievance redressal system under the IT Rules, 2021, in which an aggrieved person can file a complaint with the content publisher first. They are expected to resolve it within 15 days. The complainant can then appeal to a self-regulatory body formed by the publishers to look into the complaint if they are not satisfied with the resolution or their complaint is not addressed within the specified time. The final stage involves an inter-departmental committee constituted by the Ministry of Electronics and Information Technology (MeitY).

Why it matters: The online gaming industry has been reeling from regulatory uncertainty as multiple states come up with differing regulations. The meeting was significant as it gave the industry a chance to air their concerns in front of the MeitY officially for the first time.

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What were the issues discussed during the meeting?

Explore a self-regulating organisation: There was consensus in the gaming industry that there should not be a statutory body for oversight, sources informed MediaNama. The consensus was in reaction to a private member’s bill in the Lok Sabha that proposed an Online gaming Commission (OGC). The industry instead suggested that the government approve a self-regulating organisation (SRO). The minister has asked the stakeholders to come back with suggestions on how such a model will look like in reality, the sources said.

Drafting a uniform policy: The industry was informed by Rajeev Chandrasekhar that the government was looking to regulate the sector with a uniform policy, the source said. It has been one of the key demands of the industry roiling from state bans across the country. As of writing this report, states such as Karnataka, Tamil Nadu, Andhra Pradesh, and Kerala have moved to ban online gaming in their jurisdictions. However, most of these bans were struck down by the respective high courts later.

  • Centre has jurisdiction: The gaming industry has been emboldened by the court judgements which stipulate that a game of skill and as it does not involve betting and gambling does not come under the purview of the state government, a source told MediaNama. It is why companies think that the Union government can lay down a policy of its own, the source added.

Drawing distinction between a game of skill and a game of chance: Many industry stakeholders want the government to put out clear-cut definitions of what constitutes a game of skill and a game of chance, as per sources. The government has asked the industry to submit suggestions on what should be the parameters to define a game of skill. The minister was briefed about the pain points of the industry, the source added.  On their part, there was no confusion among industry stakeholders on what is a game of skill and how to classify the two.

Take action against offshore betting: The industry also expressed concern about the mushrooming of offshore betting companies and called the government to act against them as they were illegal. The presence of these companies was blurring the line between what is legal and what is illegal and it was incumbent upon the government to act swiftly against these companies, as per the source. Chandrasekhar remarked that MeitY can regulate anything on the internet through the IT Act, 2000, but not betting companies as gambling/betting is a state subject.

There were also discussions around the problem of gaming addiction stemming from in-app purchases and Battlegrounds Mobile India (erstwhile PUBG). The problem of addiction has become an acute one as is demonstrated by several news reports from all over the country. A policy will have to put in place checks and balances to address the issue of addiction comprehensively.

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What will be the role of the panel set up by the Union government?

The work on drafting a uniform policy, promised by the Union government, began last month when the Union government set up a committee, Hindustan Times reported. The committee has been asked to come up with a way to regulate online gaming and to identify a ministry to oversee it, the report added.

The committee will consist of the following:

  • Chief Executive Officer of NITI Aayog,
  • Secretaries of the following ministries-
    • Home,
    • Sports and youth affairs,
    • Information and broadcasting,
    • Electronics and information technology

The committee will study regulatory regimes around the world and pick up the best practices in its recommendations, HT said. It will develop a structure of the proposed laws required, and consult experts. It is expected to submit a report in three months, HT said.

The committee has to look after the following parameters, as per HT:

  • Ease of doing business,
  • Compliance,
  • Level-playing field,
  • Protection from user harms such as addiction.

What does the private member’s bill on gaming regulations propose?

A private member’s bill by the Lok Sabha Member of Parliament Dean Kuriakose proposed an Online Gaming Commission (OGC) to regulate the online gaming industry earlier this year.

The Online Gaming (Regulation) Bill, 2022, was necessary to prevent fraud and misuse as India has around 420 million active online gamers and the industry is slated to grow to $5 billion by 2025, the draft said. It added that these games had addictive properties and children were likely to succumb to peer pressure and spend on “in-app purchases’ available in these games.

“..more people will be exposed to online games in the coming years. The effect of long hours of gaming, especially amongst adolescents, is well known. It can impair normal socialisation, can cause physical and mental harm and even monetary loss,” read the draft bill.

The OGC would deliberate upon limitations on the amount of time one can play everyday and the amount of money one can spend on such games, etc.

It has also been tasked to carry out the following functions:

  • Provide oversight of the functioning of Online Gaming Websites,
  • Prepare periodical or reports on online gaming for the Union government,
  • Suggest measures to control or curb illegal online gaming,
  • Grant, suspend, and revoke the licence of online gaming websites.
  • Determine fee for licence applications and renewals of such websites.

This post is released under a CC-BY-SA 4.0 license. Please feel free to republish on your site, with attribution and a link. Adaptation and rewriting, though allowed, should be true to the original.

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Written By

I cover several beats such as Crypto, Telecom, and OTT at MediaNama. I can be found loitering at my local theatre when I am off work consuming movies by the dozen.

MediaNama’s mission is to help build a digital ecosystem which is open, fair, global and competitive.



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