new Delhi: The draft regulations for online gaming in India, released by the Ministry of Electronics and Information Technology (MeitY) on Monday, have resurrected some of the issues the gaming industry has been facing for a while, such as the ‘skill gap’. Difference between game. and ‘games of chance’, and whether the industry should be regulated by the central government or the states.
‘Draft Amendment to IT (Intermediary Guidelines and Digital Media Code of Conduct) Rules 2021’, released by Minister of State, MeitY, Rajeev Chandrasekhar. offer Restrictions on betting and betting in online sports.
According to the draft rules, an online game is one that is “offered on the Internet and can be accessed by a user through a computer resource if he makes a deposit with the expectation of winning”. An “online gaming intermediary” means an intermediary that provides one or more online games (on the Internet).
The rules propose to set up a self-regulatory body for grievance redressal and mandate Know-Your-Customer (KYC) norms for gamers and online gaming intermediaries. The self-regulatory body will consist of five members from diverse fields such as medicine, online gaming, public policy, IT and psychology.
“Online gaming is an important part of the innovation and startup ecosystem that we see developing around the world,” Chandrasekhar said in a press briefing on Monday. “Online game betting and online game advertisements have been brought in as a prohibition. The self-regulatory body which has been designed and built into the regulations will be responsible for determining and certifying the permitted online gaming intermediaries on the Internet.
Consultations with stakeholders will begin next week and the ministry intends to come up with something more concrete by February. Discussions will be held with startups, investors, gamers and thinktanks from the sector.
read this also, Animation Classes for Experimental Arts Degrees: A Government Roadmap to Boost the Gaming and Content Sector
State or Centre?
Online gaming section was handed over to the IT ministry In December Last year. This comes after an inter-ministerial task force submitted its report on online gaming regulation proposals to the Union Cabinet.
Until this development, online gaming was considered to be the purview of the states.
State governments in Assam, Meghalaya, Nagaland and Tamil Nadu, among others, were active in regulating gaming. a law commission report good The 2018 Bill on Online Betting and Gambling also specifically mentioned that it would be up to the states to regulate gaming (including online gaming).
Chandrasekhar, however, said during Monday’s press briefing that “everything Internet comes under MeitY and all intermediaries on the Internet are regulated by the IT Act”.
“States can do whatever they want to do in terms of gambling and betting,” he said. “Our job and duty is to regulate the Internet and set rules for the safe and reliable functioning of the Internet. We are not policing; our intention is that online gaming in India has tremendous potential in terms of startups and investments. We intend that more and more startups (should) grow in the area.
According to technology and gaming lawyer Jay Saita, the matter of whether the online gaming segment should remain with the states or the central government is still unresolved, and “the introduction of draft regulations without consultation and consensus among states is not appropriate”.
“The issue of whether online gaming can be regulated by the Center or states is not resolved and is pending before the Supreme Court in appeals filed by the Tamil Nadu and Karnataka governments,” Saita told ThePrint.
He said the central government has “consistently claimed – in affidavits before the High Courts and in written reply to Parliament – that the power to legislate on the subject rests only with the States”.
Vidushpat Singhania, managing partner at Krida Legal, a firm that deals with gaming laws in India, expressed similar views.
“Two years ago, MEITY gave an affidavit in the court stating that online gaming was not in its purview and states should decide on the issue. Now MeitY has fortunately taken up the task of regulating online gaming, which is a big change,” Singhania told ThePrint. “State governments are unable to stop bad operators in the ecosystem, or allow them to enter the ecosystem because of the national level reach of these functions. But not always successful in curbing”.
He also said that the draft online gaming rules may invite opposition from the states.
“I think they are likely to have reservations in states like Sikkim, Meghalaya and Nagaland, as they earn revenue by licensing gaming activities. Other states may also object, as they may believe that betting and gambling are traditional forms of gambling. It has been a state subject since ages, where states have regulated it. Singhania said the Tamil Nadu government is also likely to back down, as it brought in an ordinance to ban certain types of online gaming.
games of skill and games of chance
Another vexing issue is the definition of ‘games of skill’ and ‘games of chance’, which have not been specified in the draft rules.
According to Chandrasekhar, the ministry is yet to define the two but has laid down the basic principles of online gaming and “betting”.
He said: “We are not getting into the question of ‘games of skill’ and ‘games of chance’, because the rules are not like that. The rules govern betting. It is not a question of games of skill or games of chance; It is basically a prohibition of betting on any sport.
Some experts point to this lack of distinction as a problem.
According to Akash Karmakar, Partner, Law Offices of Panag & Babu, “With allegations of gambling and betting, there is a need for a clearly defined safe harbor for games of skill to operate. The rules in their current form would have lost an opportunity provide a language capable of providing a safe harbor for games of skill (which are continually challenged as games of chance).
He further pointed out that the rules “only reiterated” that online gaming should conform to laws in force in India, but were conspicuous by their absence as to what is a “game of skill” that would be protected. against the charges”.
Due Diligence & KYC Norms
An additional layer of due diligence is expected of online gaming intermediaries.
According to the draft rules, “the online gaming intermediary shall display a demonstrable and visible mark of registration on all online games registered by the self-regulatory body”.
Platforms must ensure that they prominently display all their “terms, privacy policy, terms of service and user agreements”, including the “policy relating to withdrawal or withdrawal of deposits made with the expectation of winning” and risk Related information is included. Financial loss.
The online game intermediary will also have to follow a strict Know Your Customer process and “prominently publish on its website, mobile-based application or both, a random number generation certificate from a reputed certifying body for each and No-bot certificate. The online game offered by it, along with its relevant description”.
There will also be mandatory identity verification of gaming “users”.
When asked the reason for this, Chandrasekhar said that “precautionary measures” were necessary.
“There will be some KYC for gaming users, especially as we are going to charge license fees, and they should not be anonymous. These are normal precautions,” he told reporters.
Referring to the “crypto issue” in context, he said: “Part of the problem with crypto was that there were exchanges and platforms that were built that had zero KYC and so money was being deposited, transferred was, was being exchanged, etc. I don’t want this anywhere on the internet (in India) in future. So we are talking about open and secure environment.
Online gaming intermediaries, like social media intermediaries, will be required to have a chief compliance officer as well as a “nodal contact person for 24×7 coordination with law enforcement agencies and authorities”.
(Editing by Nida Fatima Siddiqui)
Read also: 1 size fits all? Industry welcomes policy on animation, VFX, gaming and comics but shows concern