Context: The Ministry of Electronics and Information Technology has made an amendment to the IT Rules, 2021, to regulate “online real money games”.
Decoding the News: The Amendment
- Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Amendment Rules, 2023 of IT Ministry requires real money gaming platforms to register themselves with a Self-regulatory body (SRB).
- The Self-regulatory body (SRB) will determine whether or not the game is “permissible”. Three SRBs will be registered soon.
- If the SRB does not certify a gaming platform “permissible,” then the protection provided under amendment will not be applicable to them, allowing states to take action against them for being gambling platforms.
- Games that have been certified as permissible will be allowed to operate legally, even if they involve deposits against an expectation of winnings.
- However, Video games where money is not involved need not approach an SRB for permission.
- Other associated guidelines
- Ministry of Information & Broadcasting issued warning to media entities, platforms and online intermediaries against airing ads of betting and gambling platforms.
- The advisory is applicable to all media formats, including newspapers, television channels, and online news publishers.
What is Online Gaming?
- Online gaming refers to types of games that are played over some form of computer network, most often the Internet.
- Online real money game refers to an online game where a participant makes a deposit in cash or kind with the expectation of earning winnings on that deposit. It is often equated with gambling.
- Regulation: Gambling is on India’s State List. States can regulate or ban this. Some states have placed restrictions on online skill-based gaming or buried the sunrise sector in regulatory ambiguity.
- Legal Opinion:
- The Tamil Nadu government had banned all types of internet gaming and said “skill games played for money or other stakes” are illegal in the state.
- In August 2021, the Madras High Court struck down the law as unconstitutional. It distinguished skill-based game with gambling.
- “Games of skill” are legal commercial activities protected by Article 19(1)(g) of the Indian Constitution, according to Supreme Court and High Court judgements.
Online Gaming Industry in India
- Online gaming, including e-sports, online casual games, and real money gaming, is expanding faster than OTT, television, and social media platforms in 2019-20.
- The online gaming industry in India expanded at a Compound annual growth rate (CAGR) of 38% between 2017-2020, as opposed to 8% in China and 10% in the US.
- The revenue generated by mobile gaming industry in India is expected to exceed $1.5 billion in 2022, and is estimated to reach $5 billion in 2025.
- Percentage of new playing users in gaming in India has witnessed the fastest growth in the world for two consecutive years, at 40% in 2020 and reaching 50% in 2021.
Pros and Cons of Online Gaming
|Online gaming industry is expected to provide economic benefits in form of revenues.
The industry will create jobs, especially in software development and related sectors.
The growth in gaming industry shows that it has potential to attract significant global investments.
Online gaming, especially those involving skills is a great source to develop early learning skills for youngsters.
Even though there are financial risks involved, there has been a steady rise in number of people earning income by playing online games.
|There is increasing number of suicides or crimes committed due to financial losses faced in online gaming.
There is no regulatory framework to govern various aspects of online gaming in India, including grievance redressal and player protection.
Online gaming has turned into an addiction for large number of youth and students, affecting their future.
Children playing online games for extended periods experience health issues, including eye problems, sleep deprivation etc.
- Effective policies: Regulation and responsible gambling will protect gamers. Combining responsible gaming with effective policies and advisory services would help define a strategy to safeguard players and educate stakeholders.
- Inculcating best global practices: Globally, gaming is a well-regulated business, and the UK, the US, and EU have regulations in place to ensure responsible play.
- Studying worldwide best practices will help create a gaming regulation that protects players, encourages responsible gambling, and helps legal operators while weeding out lawbreakers.
- Stakeholders consultation: A discourse between the government and the industry is urgently needed to address how the business operates, existing safety measures etc.