Proper regulations for online gaming in India have been in the works for quite some time now. Concluding that drafting process, India’s Ministry of Electronics and Information Technology (MeitY) has now come up with the finalised rules for online gaming. The new rules for the regulation of online gaming in India include the prohibition of online games that are involved in betting or wagering, as well as a framework of multiple self-regulatory organizations (SROs).
As per Minister of State for IT Rajeev Chandrasekhar, who spoke to reporters in Delhi on Thursday, MeitY will, under the new rules, allow the setting up of these SROs to determine whether a real-money game is permitted to operate in India or not. “These rules don’t deal with all the sophistication into what is game of chance or game of skill,” Chandrasekhar said in a press briefing. These rules come after MeitY held a public consultation and issued draft regulations for online gaming in January, as well as conducted discussions with stakeholders (including gaming companies, industry bodies, players, and lawyers) in recent months. Under the new rules, an online game is defined as one that is “offered on the internet and is accessible by a user through a computer resource or an intermediary.”
Initially, the Indian government will notify three self-regulatory organizations (SROs) that will be in charge of approving the games that can operate in the South-Asian country with a rapidly-growing online gaming market. These SROs will comprise of industry representatives, educationists, and other experts such as child experts, psychology experts, and others. Additionally, the SROs will be empowered to resolve complaints from users through a grievance redressal mechanism, while all gaming companies will have to ensure that such a game is registered with and approved by an SRO, before they are hosted, published, or advertised. The gaming intermediary will be required to display the credentials of the SRO that registered and approved the game through its website and mobile app.
“We are only regulating real money games that involve wagering. By process of exclusion, all other kinds of games will be permissible,” Chandrasekhar said, adding that SRO can declare online real money games as permissible if it is satisfied that “the online real money game does not involve wagering on any outcome.”
The pandemic led to a surge in the gaming industry, with people turning to video games as a form of entertainment and social connection while staying at home. As a result, the industry witnessed a significant increase in revenue and engagement. Gaming companies adapted to the situation by launching new games and updates, increasing server capacity, and improving online features to provide a better gaming experience for players. Furthermore, the pandemic also accelerated the growth of the esports industry, with more people tuning in to watch competitive gaming events. Additionally, the increased demand for gaming led to the creation of new jobs and opportunities within the industry.
The Indian gaming market was one of many to reap the benefits – following an unprecedented growth in terms of app downloads and revenue, the Indian gaming sector saw an increase in its revenue from $2 billion in FY21 to $2.6 billion in FY22, and it is expected to expand at a CAGR of 27% to $8.6 billion in FY27. Skill-based real money gaming accounts for more than half of the industry’s revenue, and has come under heavy fire from several state governments in recent times, In fact, some states such as Tamil Nadu, Andhra Pradesh, Telangana, Kerala, Karnataka even banned or tried to ban such games, though several of these bans were later challenged in courts by skill gaming startups and industry associations, and the suspensions were overturned. Later in 2021, the Supreme Court upheld fantasy sports as skill-based games.