Govt looks to bring online games under its IT rules

Uploaded for public comments, the plan was shared as proposed amendments to the intermediary guidelines to cover online games, which was defined 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”.

The ministry of electronics and information technology (Meity) on Monday proposed to bring online gaming under its information technology rules, introducing a largely self-regulatory mechanism with compliance requirements such as user verification and a mechanism to address complaints.

“States can do whatever they want to do vis-a-vis gambling and betting,” Union minister for IT, Rajeev Chandrasekhar, said (PTI)

Uploaded for public comments, the plan was shared as proposed amendments to the intermediary guidelines to cover online games, which was defined 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”.

The definition indicates the law will cover games involving real money or a deposit of any value, and the rules go on to clarify that this will not cover activity that can be classified under gambling laws, which falls under states’ purview.

Intermediaries in India, the rules added, are not allowed to host games that are not in conformity with any law for the time being in force in India, “including any such law relating to gambling or betting or the age at which an individual is competent to enter into a contract”.

“States can do whatever they want to do vis-a-vis gambling and betting,” Union minister for IT, Rajeev Chandrasekhar, said while introducing the rules on Monday. “Our job and duty is to regulate the internet, to prescribe for rules for a safe and trusted internet. The government is looking at online gaming. We are not policing it. What happens with states, which states legalise gambling and betting, we have nothing to do with that. We are interested in growing the online gaming system in a way that does not contravene any state laws.”

The government’s focus on the sector comes at a time when analysts see a boom in the industry, with projections pegging gross sales to reach $7 billion by 2026, news agency Reuters reported, citing consultancy Redseer.

An inter-ministerial task force set up in May last year suggested the government explore the possibility of a central legislation with respect to online gambling and betting, but this was opposed by some states.

The IT ministry proposed that online gaming companies or intermediaries – a platform that provides several such games -- register with a concerned self-regulatory body. “Before hosting or publishing or advertising an online game for a consideration, ascertain from the online gaming intermediary and verify from the concerned self-regulatory body…” the rules states.

The government also proposed several additional due diligence requirements, which include displaying or informing users of their registration with any of the regulatory bodies, the other titles they offer and how user data is protected.

The gaming provider will also have to inform users about the policy related to withdrawal or refund of their deposits, how their winning is determined and the fees or charges.

At the time of sign-ups, a provider will also have to “identify the user and verify his identity” using a mechanism as laid down by the Reserve Bank of India, the rules added, and allow gamers to have a voluntary verification to display within the ecosystem, similar to what the government has proposed for social media users.

Industry experts welcomed the proposed rules. “The rules lay the foundation for responsible growth of the gaming industry, and provide an elaborate framework for self-regulation. Section 69A is the only practical enforcement mechanism available under the current Information Technology Act, and is therefore employed to maintain industry hygiene. It enables government to take punitive action against errant actors. This is particularly important in the context of the wide availability of several offshore betting and gambling applications that are patently illegal,” said Vivan Sharan, founder of policy think-tank, Koan Advisory.

“We are grateful to the government for acknowledging the long-standing need of gamers and the online gaming industry. We believe this is a great first step for comprehensive regulation for online gaming and will hopefully reduce the state-wise regulatory fragmentation that was a big challenge for the industry. These rules will go a long way in ensuring consumer interest while helping the industry grow responsibly and transparently. These rules will also be a start in curbing the menace of anti-national and illegal offshore gambling platforms,” said Roland Landers, CEO of the All-India Gaming Federation (AIGF).

The IT ministry was designated as the nodal governance body for online gaming last week, following a long debate on whether platforms should be considered intermediaries or publishers.

According to Kazim Rizvi, founder of tech policy think-tank The Dialogue, the proposed Rules specifically recognise gaming platforms as intermediaries and delineate due diligence mandates that they must adhere with to protect user rights. “These measures would create greater consumer trust in the industry. The mandate on publishing the platform’s privacy policies with respect to the collection and processing of the user’s data is critical for data privacy,” he said.

“Moreover, the additional due diligence mandates for the gaming intermediaries to inform the users regarding the policies related to withdrawal and refund of the deposits made by the users, the risks of any financial losses and addiction threats, their KYC measures and the steps taken by them to protect the deposits of the users will ensure greater accountability and infuse consumer trust. Similarly, the requirement to publish a Random Number and No Bot certificate will help in bringing more transparency around the operational aspects of these platforms and facilitate the creation of a level playing field for legitimate companies by weeding out the spurious gaming platforms.”