2023 Unveils with Revolution In The Online Gaming Industry: Draft Online Gaming Rules Proposed

Introduction

Since its independence, India has had no concrete law regulating the online gaming sector. With advancing times, the government felt a need, which prompted it to set up an inter-ministerial task force in May 2022, whose assigned task was to explore online gaming domains and recommend regulations that are needed for its governance.

Considering the recommendations put forward by the task force, the government, on 2^nd January 2023, has come up with the “draft online gaming rules”. These regulations are the proposed changes to the Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021[1].

The Minister of State for Electronics & Information Technology, Rajeev Chandrasekhar, who headed the seven-membered task force, said that he is hopeful about these promising rules and affirmed that these amendments will enable the online gaming ecosystem to expand & prove to be an important catalyst to India’s one-trillion-dollar digital economy goal by 2025[2].

He also said that through the draft online gaming rules, the government envisions a bigger role for start-ups in the online gaming industry[3].

These rules, if successfully passed, are going to be the first centralized law in India to regulate the gamut of online gaming activities in the country and will nudge India one step forward towards securing cyberspace and promoting the growth of online gaming culture in the country.

Need For Regulation In The Online Gaming Domain

With the growing popularity and expanding user base of online games around the globe, threats appertaining to continuous exposure on these platforms have become highly vulnerable. According to the Norton Cyber Safety Insights report, 75% of the surveyed online gamers in India have experienced cyberattacks on their gaming accounts[4].

Cases of cyberbullying, doxing, identity theft, and other online scams have cast risky barriers over the usage of online gaming platforms. Therefore, many countries in recent years have laid down laws for the governance of these platforms to provide their users with reliable and secure cyberspace.

Following the bandwagon, India, too, has recognized the indispensable role of the online gaming market in a country’s digital economy and has unveiled “draft online gaming rules” to regulate and secure online gaming platforms. The proposed draft envisions promoting the online gaming culture and efficiently utilizing its contribution towards developing India’s digital sector.

Proposed Amendments To The It Rules, 2021

The Government of India has allocated all the issues pertaining to online gaming to the Ministry of Electronics and Information Technology (MeiTY).

The MeiTY has proposed modifications to the Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021[5] (IT Rules, 2021), which were created by the government in accordance with its authority under the Information Technology Act, 2000[6], after taking into account the recommendations of the inter-ministerial task force and seeking public input on the same[7]. Some paramount amendments made to the IT Rules 2021 are:

Definition Of The Terms: “Online Game” And “Online Gaming Intermediary”

For the first time, online gaming has found a reference in Indian laws.

The draft defines an “online game” as a game that is available on the internet, which a user can access through a computer by making a deposit, in cash or kind, with the expectation of early winnings.

While an “intermediary in the online gaming industry” is a party that connects users to one or more online games.

Due Diligence To Be Observed By The Online Gaming Intermediaries

The proposed draft extends the definition of “due diligence” to include “online gaming intermediary” in addition to “social media intermediary” and “major social media intermediary”. Amendments made to the rule of due diligence are:

Rules, Regulations, And Limitations To Be Informed

In order for any of its users to access and use its computer resource in a language they understand, the online gaming intermediary must publish on its website, mobile application, or both the rules and regulations, the privacy policy, and the user agreement in English or any other language included in the 8th schedule of the Constitution.

Rules Regarding Storing, Hosting, Or Publishing Information

A reasonable effort must be made by the online gaming intermediary to stop users from hosting, displaying, uploading, editing, publishing, sending, storing, updating, or sharing any data that:

• Due to the nature of the game, it is not in compliance with any laws currently in effect in India, and
• Violates any law enforced in the country.

Observance Of Additional Due Diligence By The Online Gaming Intermediaries

While providing services of any online game or while discharging its duties, the online gaming intermediary shall comply with the following additional due diligence:

Displaying A Mark Of Registration

All online games that have been registered by the self-regulatory body must bear a tangible mark of representation, according to the online gaming intermediary.

Notifying The Users About The Know-How

The intermediary in online gaming must notify its users of:

• All online games provided by that intermediary, together with the guidelines it adheres to for withdrawals or refunds of deposits made by users in anticipation of early winnings, the method for dispersing such winnings, and any additional fees that users must pay
• Financial risk and addiction involved with the game
• The framework of the self-regulatory body, and
• Measures taken to safeguard the deposit made by the user.

Verification Of Users

At the time of commencement of the user account in the game, the intermediary shall identify the user and verify his identity. Moreover, the users shall be facilitated with the ability to voluntarily verify their account, wherein they shall be provided with a demonstrable mark of verification that will be visible to all the users of that platform.

Having A Physical Contact Address

The intermediary shall have a physical contact address in India and shall publish it on its website, mobile application, or both for receiving communication addressed to it.

Modus Operandi Of The Complaint Mechanism

The intermediary shall implement an efficient mechanism for receiving complaints and grievances relating to the violation of provisions of the rule. The intermediary shall provide a unique ticket number for every complaint or grievance and shall facilitate the complainant with the ability to track his complaint or grievance.

Safeguarding Online Gaming Intermediaries By Self-Regulatory Bodies

The framework evolved by the self-regulatory body shall align with the proposed rules and secure the interests of the online gaming intermediaries. The self-regulatory body shall have:

Registration Under The Ministry

The self-regulatory body shall be registered with the Ministry of Electronics and Information Technology (MeiTY). The MeiTY may consult any appropriate Government or its agencies before registering the self-regulatory body.

Criteria For Registration

Upon submission of an application for registration by a company incorporated under section 8 of the Companies Act 2013[8] by online gaming intermediaries, or a society registered under the Societies Registration Act, 1860[9] by online gaming intermediaries, which is desirous of being registered as a self-regulatory body, the MeiTY may register them on qualifying the following major criteria:

• The number of online gaming intermediaries enrolled as its members
• Track record of the self-regulatory body in promoting responsible online gaming
• Deployment of technology, expertise, and other relevant resources for evolving the desired framework and testing and verifying the conformity of online games with the same. Moreover, continuously updating the framework, testing, and verification protocols.

Criteria For Granting Membership To An Online Gaming Intermediary

The registered self-regulatory body may grant membership to an online gaming intermediary which checks the following criteria:

• Adherence to the proposed rule, including due diligence and additional due diligence, by the intermediary and all online games offered by it
• Track record of the online gaming intermediary.

Criteria For Granting Membership To An Online Game

The registered self-regulatory body may grant membership to an online game that checks the following criteria:

• It shall be offered by an online gaming intermediary which is a member of a self-regulatory body
• It shall not contain anything which is not in the interest of sovereignty and integrity of India, defence of India, security of the state, friendly relations with foreign states or public order, or incites the commission of any cognizable offence relating to these factors
• It shall be in conformity with the laws for the time being in force in India.

When Can Other Game Be Regarded As An “Online Game”

Any game made available on the Internet and accessible by a user through a computer resource without making any deposit and that such game may harm the sovereignty and integrity of India or security of the state or friendly relations with foreign states or public order, on account of causing addiction or other harm among children, then the MeiTY may declare that game to be treated as an online game.

Critical Analysis: The Prospects Of The Online Gaming Industry In India

The introduction of the draft online gaming rules has historically interpolated the gamut of online gaming within the ambit of Indian law.

The future of the online gaming industry in India will be positively impacted by these rules because the companies will have to invest in compliance infrastructure and technology to ensure that they meet regulatory requirements.

The companies will also have to grapple with the challenges of balancing user privacy and data protection for compliance with the rules.

This would revolutionize the online gaming sector in India as the government’s direct participation in the modus operandi of the online gaming intermediaries would protect the users and safeguard their interests, which would provide impetus to the online gaming culture as well as, the online gaming market in the country.

All in all, the online gaming industry in India has a potential for growth and with the implementation of the proposed amendments, it would be more organized and regulated, which would help it to grow sustainably and contribute to India’s digital economy.

End Notes

[1] Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021.

[2] PIB Delhi, Online gaming Industry poised for rapid extension and growth: MoS Shri Rajeev Chandrashekhar, PIB, (Jan 2, 2023, 8:50 PM).

[3] ibid 2.

[4] Tech Desk, Every 4 out of 5 Indian Gamers lost Rs. 7,894 to cyberattacks this year: Norton Special Report, The Indian Express, (Nov 16, 2021, 6:32 PM).

[5] id 1.

[6] The Information Technology Act, 2000, Acts of Parliament, 2000(India).

[7] MeiTY, The Ministry of Electronics and Information Technology invites feedback on the draft amendments to the IT (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021 in relation to online gaming, MeiTY, (Jan 2, 2023, 8:50 PM).

[8] The Companies Act, 2013, § 8, Acts of Parliament, 2013(India).

[9] The Societies Registration Act, 1860, Acts of Parliament, 1860(India).

By:  Neeraj Anand and Aman Raj are students at National University Of Study and Research in Law, Ranchi