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Gaming rules: Why the definition of “online game” is confusing and needs to change #NAMA

Our key takeaway is that the Ministry needs to rephrase the definition and also further clarify terms like “deposit,” “winnings,” and “kind”

At a MediaNama event held last Friday on the Impact of India’s Online Gaming Rules, we spent over an hour (the budgeted time was 20-30 minutes) just discussing the definition of “online game” proposed by the IT Ministry and we still didn’t reach a consensus on what is and isn’t covered by this definition. The definition is broadly worded and if left as is, could lead to collateral damage to industries and companies that weren’t intended targets.

 The main takeaways from the discussion was that the Ministry needs to rephrase the definition and also further clarify terms like “deposit,” “winnings,” and “kind.”

Definition of “online game”

The proposed rules define an online game as “a game that is offered on the Internet and is accessible by a user through a computer resource if he makes a deposit with the expectation of earning winnings”.

  • Deposit refers to any “deposit made or committed to, in cash or in kind, by the user for participating in an online game.”
  • Winnings refer to “any prize, in cash or in kind, that is distributed or intended to be distributed to a user of an online game based on the performance of the user and in accordance with the rules of such online game.”

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Definition of “game”

  • Where in law is “game” defined? “Where in law are games defined, because this looks like a recursive definition, right? An online game means a game …,” MediaNama’s Nikhil Pahwa asked. For example, is quizzing a game? Can they argue they are an intellectual activity and not a game, Pahwa asked.
  • “Game” is not defined in law, can go by the dictionary definition: What is a “game” has not been defined in law, gaming lawyer Jay Sayta said. But Sayta and others in the room pointed out that in cases where a word is not defined in law, the courts will go by the dictionary definition. “The Oxford Dictionary says any activity which is done for leisure or fun is the standard understanding of the word game,” a member of the audience pointed out.

Who might be covered by this definition?

  • Games involving stake: The obvious and intended targets of this definition are games that involve a stake, also known as real money games or pay-to-play games. Examples include fantasy games, rummy, poker, and paid versions of games like ludo, carrom, etc.
  • Gamification experiences: This is where the confusion arises because gamified experiences, which are popular across various online platforms including e-commerce platforms, could also fit under the definition of online games if we interpret the term loosely.  “I’ll give you an example, Amazon, within its app, every Sunday runs this spin the wheel thing, where you may win something or the other and you have to answer a couple of quizzes. Would that also be covered under this as a game because there are winnings involved over there,” Nikhil Pahwa asked. Some lawyers in the audience disagreed, explaining that there is no deposit involved in this case. 
  • Will games like PUBG be covered? “If I play PUBG, there’s no gambling as such, but I can buy new uniforms and things, which my character and avatar can use. Now I’m making a transaction and there’s this expectation of winning the chicken dinner. It does not say that you have to win cash,” does this make games like PUBG fall under the definition, one of the audience members asked. But since there might not be any deposit involved, this might not qualify, some lawyers in the room pointed out. Others in the room asked if a deposit is made in “kind” rather than cash, then does the game qualify, and what exactly is the definition of “kind.”
  • What about Cred? Illustrating the previous point with an example, Nikhil Pahwa asked if Cred will qualify because you can play games to win coins that can later be used to avail discounts.  “Let’s take Cred. They say you pay your credit card through us to get points, so you can participate in this winning mechanism. So effectively would that be seen as a deposit in kind,” Pahwa asked. Lawyers in the room disagreed with this argument explaining that the payment is being made for the credit card bill and not to play any games and the games are ancillary activities. 
  • Google Pay? Similar to the Cred example, another audience member asked: “Google Pay runs something every time there’s a new year or pujas and all, where they gamify the entire set. So they tell you, you go scan from a vendor, you pay an electricity bill, and for each of those you will either get a scratch card or star points or something and you can, after a number of star points, you win a chance to either get it back in cash or you get a discount code for something else. The entire setup is essentially gamified. Is that a game then? Because I’m putting in money.” Again, many in the room disagreed. “I think the deposit has to have a more direct nexus with the game itself, rather than with an ancillary promotional activity, et cetera. Those kinds of contests are actually covered under the Consumer Protection Act,” Jay Sayta remarked.
  • Games involving stake but no expectations: Suppose I play a game on the internet but don’t have any expectations of earning a winning, then is it not an online game, Nikhil Pahwa asked.
  • Is my email ID or phone number considered a deposit? “What if I deposit my email ID or phone number to play a game? Is it considered a deposit,” an audience member asked.
  • Games which involve deposits but not withdrawals: “A game can involve a deposit but not involve a withdrawal, which means it’s a closed wallet kind of a system. For example, what Tencent did really well in China, where people were basically trading virtual goods. I’m just saying that where the value itself is virtual and there is no withdrawal as such, do none of these rules apply then,” Nikhil Pahwa asked.
  • E-football: “I’ll give you an example, I play e-football every day. I buy eFootball coins. And then using those coins, I get what is called a chance deal. So let’s say they have the top players in the Serie A, in Italy, and they give me a chance of winning one of eight players if I use that deal. It’s entirely chance based. Would that be covered under this,” Nikhil Pahwa asked.
  • Car racing game and booster fuel: “For example, it’s a car racing game. I take booster fuel to win the car race. Okay, now I’ve made the transaction, the deposit is done and I have a chance of winning. Now, for example, I win the game. Now technically the definition is fulfilled. The transaction is complete,” one of the audience members remarked. Some in the room disagreed saying there is no withdrawal involved here so it doesn’t qualify, but others pointed out that the withdrawal doesn’t have to be in cash and can be in kind. For example, if winning the race got the user more booster fuel, does the game qualify then? To this, some lawyers responded that the winning has to be exchangeable for monetary value, which is the context in which “kind” should be interpreted.  
  • Does selling stuff you’ve built in a game count as winnings? Suppose “you are not withdrawing anything, but you also have a chance to go to the side market where you can sell your character. You’ve paid, let’s say, X amount of money to build up your character. You have also spent time sort of building up a character and then you sell it on the marketplace, either on the dark web or wherever it is. Is that covered,” a member of the audience asked.

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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