Balanced Regulations Nurturing India’s Online Games Industry

Last year, the Ministry of Electronics and Information Technology (MeitY) proposed a self-regulatory mechanism for online gaming in India. Despite being a multi-billion-dollar industry, online gaming in India is not yet centrally regulated. Entities like the MeitY and Telecom Regulatory Authority of India (TRAI) are in motion to establish a regulatory framework. In the meantime, state laws and judiciary systems provide much-needed clarity on matters related to gaming in India.

Apart from regulating the use of currency, game time regulations, limits on fund use, etc., regulations are necessary to monitor and eliminate fraudulent practices. As a gamer, if you are playing poker, you should be assured that your Texas Holdem poker hand is not compromised through cyber malpractices. Well-recognised platforms like Pocket52 have stringent measures in place to ensure a safe gaming environment. However, it is worth finding out how the regulations of the Indian online games industry are balanced at the moment.

Regulations in Indian Gaming: Where it Stands

Multiple regulatory offshoots have emerged since the MeitYrecommendation on self-regulation was made last year. States like Karnataka and Tamil Nadu have state-level frameworks. TRAI addressed the regulatory framework needs in online gaming with the launch of consultations on a proposed National Broadcasting Policy.

In the meantime, MeitY made necessary amendments to the IT rules to include regulation of the online gaming sector in India. With this, the government plans to appoint three self-regulatory organisations for gaming and add more in the future if required. These organisations will determine the permissibility of gaming platforms based on whether they promote games of skill or chance.

These self-regulatory organisations are regulating real-money games and following a process of exclusion. Platforms must be registered and approved by one of these organisations, the credentials of which will be displayed on their website and mobile app. In other words, you can now play your Texas Holdem on a poker game platform that is recognised by one of these organisations. The organisations will also ensure mandatory KYC of gamers and take action against platforms that do not comply with the IT rules.

The self-regulatory organisations will be registered with MeitY and will provide a grievance redressal mechanism to address consumer complaints. As of now, state governments are acting at a local level, which can (and may have) result in banning authentic and legitimate gaming platforms.

Other Key Regulatory Expectations

Nearly 83% of the Indian gaming market is contributed by real-money games. Considering that these games involve the use of user funds, regulations in these aspects are also highly desirable. Last year, the government authorised the Ministry of Information and Broadcasting to regulate gaming content and its advertising. The industry expects the ministry to introduce a clear Code of Advertisements to clear the path for genuine gaming platforms.

The industry also expects the government to bring more financial transparency. The RBI is monitoring payment gateways to identify illegal platforms and non-permissible games played in India. In the absence of this, the peddling of chance and wager-based games in the Indian market can tarnish the industry's reputation.

Platforms like Pocket52 autonomously promote responsible gaming among its users. However, the industry expects the authorities to promote responsible gaming across the industry in a uniform manner. It could mean the use of modern technology like AI algorithms to analyse player behaviour. This would also empower platforms to act more proactively through support and interventions.

Regulations are also necessary to promote the new platforms and startups in the industry. The Prime Minister raised the expectations from Indian game developers and studios to come up with world-class products. This is possible only when smaller startups can operate in a scalable and cost-effective manner. It would pave the way for Google to open its Play Store to all Indian real-money game apps, which is currently in the pilot stage.

Gaming Regulations in Other Markets

Important gaming markets across the world have implemented regulations for important aspects related to gaming.

Regulations related to spending limits are firmly in place in South Korea, while they are limited to specific scenarios in Japan under their ‘gacha’ laws. China, too, has implemented laws restricting additions to in-game wallets and purchases.

China also has strict regulations when it comes to a minor’s playtime. Vietnam has similar regulations, while Japan implements them and parental control through local ordinances. Germany is at a self-regulatory stage where developers allow gamers to set their time limits.

The European Union has a monitoring and reporting mechanism in place for the use of virtual currencies, while the USA also has compliance requirements in place.

Conclusion

Being a new industry, many gaming regulations across the world are still at different stages of implementation. In India, state laws, judicial pronouncements and proactive measures by authentic gaming platforms provide a balanced regulatory regime. However, the industry awaits a top-down approach in this aspect in the days ahead.