How to regulate online gaming in India Flashcards
NEWS
Recently, the Ministry of Electronics and IT (MeitY) has released the Draft Rules for Online Gaming.
The proposed rules have been introduced as an amendment to the Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021.
What are the Draft Rules?
Self Regulatory Body:
Online games will have to register with a self-regulatory body, and only games cleared by the body will be allowed to legally operate in India.
The self-regulatory body will have a board of directors with five members from diverse fields, including online gaming, public policy, IT, psychology and medicine.
There could be more than one self-regulatory body and all of them will have to inform the Centre about the games they have registered along with a report detailing the criteria for registering.
Due Diligence:
Online gaming firms will be required to undertake additional due diligence, including KYC of users, transparent withdrawal and refund of money, and a fair distribution of winnings.
For KYC, they will have to follow norms laid down for entities regulated by the Reserve Bank of India (RBI).
Random Number Generation Certificate:
Gaming companies will also have to secure a Random Number Generation Certificate, which is typically used by platforms that offer card games to ensure that game outputs are statistically random and unpredictable.
They will also have to get a “no bot certificate” from a reputed certifying body.
Restrictions on Betting:
Online gaming companies will not be allowed to engage in betting on the outcome of games.
Compliance:
Similar to social media and e-commerce companies, online gaming platforms will also have to appoint a compliance officer who will ensure that the platform is following norms, a nodal officer who will act as a liaison official with the government and assist law enforcement agencies, and a grievance officer who will resolve user complaints.
What is the Need for the Rules?
Around 40 to 45 % of the gamers in India are women, and therefore it was all the more important to keep the gaming ecosystem safe.
It is believed to be a great first step for comprehensive regulation for online gaming and will reduce the state-wise regulatory fragmentation that was a big challenge for the industry.
The revenue of the Indian mobile gaming industry is expected to reach USD 5 billion in 2025.
The industry grew at a compound annual growth rate (CAGR) of 38% in India between 2017-2020, as opposed to 8 % in China and 10% in the US.
It is expected to grow at a CAGR of 15 % to reach Rs 153 billion in revenue by 2024, as per a report by VC firm Sequoia and management consulting company BCG.
