To protect the safety and trust of the Digital Nagriks, the Ministry of Electronics and IT, Government of India today notified amendments to the Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021, related to online gaming and spread of false and misleading information regarding government business.
The aim of these amendments is to enforce greater due diligence by online gaming and social media intermediaries in respect of online games & fake or false misleading information related to Government business.
“It is Prime Minister Narendra Modi’s vision and goal that young Indians get every opportunity possible to create startups and innovate for the world. Online gaming is certainly a huge opportunity for India and Young Indians,” said Union Minister of State for Electronics and Information Technology Rajeev Chandrasekhar. “We see the Indian online gaming ecosystem to expand and grow into a multi-billion dollar industry and be an important catalyst to India’s one trillion-dollar digital economy goal by 2025-26,with very clear restrictions on online wagering and betting.”
These amendments have been drafted after holding widespread consultations with multiple stakeholders including parents, school teachers, academics, students, gamers and gaming industry associations, child rights bodies, etc.
The Ministry of Electronics and IT (MeitY) was allocated the matter related to online gaming rules on 23 December last year under the Government of India (Allocation of Business Rules), 1961. The Ministry, within a fortnight, prepared the draft amendments to the IT rules and uploaded them for consultations on 2 January 2023. Meetings were held with stakeholders on 11th, 17th January and 16th February 2023.
The new rules include:
1) As per the amended rules, it has been made obligatory on the part of intermediaries to make reasonable effort to not host, publish or share any online game that can cause the user harm, or that has not been verified as a permissible online game by an online gaming self-regulatory body/bodies designated by the central government. The intermediary will also have to ensure that no advertisement or surrogate advertisement or promotion of an online game that is not a permissible online game, is hosted on its platform.
2) The self-regulatory body will have the authority to inquire and satisfy itself that the online game does not involve wagering on any outcome, that the online gaming intermediary and the game complies with the rules, the requirements under law for being competent to enter into a contract (currently at 18 years), and a framework made by the self-regulatory body regarding safeguards against user harm, including psychological harm, measures to safeguard through parental controls, age-rating mechanism, and measures to safeguard users against the risk of gaming addiction.
3)The amended rules also cast additional obligations on online gaming intermediaries in relation to online games involving real money. These include the displaying of a mark of verification by the self-regulatory body on such games; informing their users of the policy for withdrawal or refund of deposit, manner of determination and distribution of winnings, fees and other charges payable; obtaining the KYC details of the users; and not giving credit or enabling financing by third parties to the users.
If in case the central government issues a notification in the interest of users or other specified grounds, the same rules and obligations will be made applicable to even those games where the user is not required to make any deposit for winnings.
4) The government may notify multiple self-regulatory bodies, which shall be representative of online gaming industry but it will function at arm’s length from their members, and a board consisting of directors who are free from conflict of interest and represent all relevant stakeholders and experts, including online games users, educationists, psychology or mental health experts, ICT experts, persons with child rights protection experience and individuals having experience in relevant fields of public policy and administration.
The rules provide for the obligations to become applicable once a sufficient number of self-regulatory bodies have been designated, so that the online gaming industry has adequate time to comply with its obligations.
5)The amended rules now also make it obligatory on the intermediaries to not to publish, share or host fake, false or misleading information in respect of any business of the Central Government. These fake, false or misleading information will be identified by the notified ‘Fact Check Unit’ of the Central Government. It is to be noted that the existing IT rules already required the intermediaries to make reasonable efforts to not host, publish or share any information which is patently false and untrue or misleading in nature.
6) The rules already cast an obligation on intermediaries to make reasonable efforts to not host, publish or share any information which is patently false and untrue or misleading in nature.
Reacting on the above development TFG founder and CEO, Jaya Chahar said, “The appointment of SRO’s is a welcoming and firm step by MeiTY towards regulating the online gaming space. The appointment will eliminate the confusion between legitimate online gaming players and offshore betting websites. This will bring further clarity to the Indian gaming industry which is at the cusp of exponential growth.”
“We laud the government’s move on clearly distinguishing between online games, online real money games and online real money games that involve wagering. By setting up a framework of multiple self-regulatory organisations comprising of diverse stakeholders a strong foundation has been laid to give clarity to developers, investors and gamers on how this fast growing industry can create opportunities for the Indian economy including jobs for the future,” said JetSynthesys CEO and founder Rajan Navani. “With over 450 million online gamers, India is poised to be amongst the largest consumers of global gaming content of the $180 billion industry over the next decade. As an integral part of the global gaming industry with category leading global games like simulated cricket, we at JetSynthesys, welcome this move as it is a step in the right direction accelerating growth.”
“As the oldest, largest, and most diverse industry association for online gaming in the country, we are grateful to MeitY for notifying the amendments to regulate online gaming under the Indian Information Technology Act, and acknowledging the long-standing demand of the gamers and the online gaming industry. We believe this is a decisive first step for comprehensive regulation for online gaming and, will propel the industry to compete globally, as envisioned by the Hon’ble PM,” said All India Gaming Federation CEO Roland Landers. “We are especially grateful that the Government recognised the industry demands and provided light touch, but comprehensive regulations, which will support innovation, boost Create in India and Brand India, and propel India’s Techade. 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.”
“This monumental decision will at last liberate Esports from the conflation with iGaming/RMG. For years, ESFI has been diligently advocating for the separation of online gaming and real money gaming/iGaming, and we are elated to finally see the government take this bold step that showcases their unwavering commitment to fostering a safe and responsible video gaming environment in the country,” said Esports Federation of India director & Asian Esports Federation (AESF) vice president Lokesh Suji. “These amendments will act as a catalyst in propelling India towards becoming a powerhouse in the world of video gaming and accelerating its overall development. It’s a great start, but still many miles to go.”
“Finally – video games & real money gaming have been given two separate identities,” said Alpha Zegus founder & director Rohit Agarwal. “It was a debate that has gone on for quite a while now, and it’s a relief that it’s finally seen the light of day. The two industries can now have their own policies, guidelines, and laws that regulate them, and the reported numbers can also stay distinct. Great move by the government!”
“Concerns raised by me in January 2023, when the draft rules were released, that the rules go beyond the scope of the parent legislation, i.e., the Information Technology Act, 2000 and the legislative powers of state to govern such online games remain. It is also not clear whether the rules framed under the powers to prescribe due diligence requirements for intermediaries, i.e., those providers not responsible for providing content can be applied to online gaming platforms that actively decide and offer their own gaming content, in the manner that the central government is seeking to apply to them,” said technology & gaming lawyer Jay Sayta.
Sayta further mentioned that the rules do not clearly define online real money games to be games involving predominant or substantial degree of skill and the rules do not clearly demarcate games involving substantial degree of skill, which are legal and constitutional activities as separate from games of chance or gambling/betting activities. The problem is compounded further by the fact that the rules leave decision as to the permissibility of a game to be legitimate game to the vagaries of ‘Self-Regulatory Bodies’ who are further required to not permit any online real money game that involve ‘wagering on any outcome’. Compounding the confusion, the central government has not clarified or made any provision in the rules that clarify or state that staking money on games classified as skill-based games would be permitted.
“On the positive side, according to the new rules, intermediaries such as hosting providers, news websites, social media websites, search engines etc. cannot host any game that is not recognised as a permissible online game by a self-regulatory body (primarily targeted at offshore betting portals) and cannot publish any advertisement or surrogate advertisement or promotion of an online game that is not a permissible online game (i.e. gambling/betting games or platforms),” he added.