What do the new amendments to the online gaming rules mean for the industry?

The Ministry of Electronics and IT (MeitY) on April 6 announced amendments to the Information Technology (Intermediary Guidelines and Digital Media Ethics code). Under the new rules, the government is aiming to assert a greater control on the expanding gaming industry. The aim is to identify and prohibit any game that involves betting and wagering, and entail a framework of multiple self-regulatory organisations to enact the changes.

Rajeev Chandrasekhar, Union Minister of State for Electronics and Information Technology, highlighted that online gaming provides significant prospects for startups, but the lack of clarity on what is permissible has created uncertainty, which the new rules aim to resolve.

While announcing the new amendments, Chandrashekhar said that the content of the game won't matter if it involves betting and wagering in any form. Under these rules, a Self-Regulatory Organisations (SRO) will be set up to determine whether online games are permissible or not based on the presence of wagering.

Games that involve wagering will be considered impermissible by the SRO, and any form of betting or wagering would be in violation of the new rules. “These rules don't deal with all the sophistication into what is game of chance or game of skill,” Chandrasekhar said.

To ensure consistency and clarity, there will be several SROs. Chandrasekhar emphasised that the new regulations aim to address not only online gaming but also the problem of misinformation.

The announcement of the new changes to rules coincide with the Indian Premier League. Market research firm Redseer Strategy Consultants, the gross gaming revenue of fantasy sports during the ongoing IPL, is expected to grow by 30-35% to reach Rs 2,900-3,100 crore in 2023. Multiple fantasy sports platforms have come up with ad campaigns that focus on IPL and feature cricketers.

While the presence of wagering in some form in these games is evident through these advertisements, the future for many gaming platforms may seem uncertain now. However, many industry heads believe these regulations were much needed and will bring forth positive changes. Joy Bhattacharjya, Director-General, Federation of Indian Fantasy Sports, says that India’s online gaming industry has already attracted $2.5B in Foreign direct investment and the federation is hopeful that this will give the industry a more solid direction. "We look forward to engaging with MeitY to seek requisite clarifications as our members initiate the compliance process," he adds.

What does the Indian gaming industry think about these new rules?

The regulation of the rapidly growing gaming industry has been sought by multiple industry heads. Roland Landers, CEO, All India Gaming Federation, believes this to be a decisive step for comprehensive regulation for online gaming and will propel the industry to compete globally. 

“These rules will go a long way in promoting consumer interest while helping the industry grow responsibly and transparently and will also help in curbing the menace of anti-national and illegal offshore gambling sites, which have been proliferating in the last few years,” he opines.

Trivikraman Thampy, Co-founder, Co-CEO, Games24x7, believes that the regulations were a must as consumer protection in gaming was becoming a need of the hour. Many of the rules that will come into effect with this amendment including age verification, responsible gaming practices, etc.

“With consumer protection and responsible gaming at the forefront, the regulatory framework will aid in arresting the proliferation of offshore and illegal gambling and betting platforms in India, which operate with little regard for consumer interest. The Self-Regulatory Bodies certification process will also ensure that games are free of bots, building consumer confidence in the industry's fairness and transparency,” he opines.

Sai Srinivas, CEO and Co-Founder, MPL, anticipates the new framework to boost investor confidence in gaming platforms as online gaming intermediaries will now be distinguished clearly from gambling. "The uniform legal framework provided by these rules will boost investor confidence. We anticipate that this will also help reduce regulatory fragmentation at the state level as also mentioned by the Hon’ble Minister, create a more stable business environment and weed out gambling platforms," Srinivas asserts.

"The legality of specific games and formats will need to be determined by legal experts. We hope that the new SRO provides greater clarity on this issue and is able to build a common framework to determine the legality of the specific games and formats," Manisha Kapoor, CEO, ASCI, opines.

Deepak Gullapalli, founder & CEO, Head Digital Works (A23), concurs with Srinivas and believes that with online gaming firms regaining positive investor interest, the move would drive new career and economic opportunities.  "Overall, this is the best possible framework and the way ahead for online gaming firms in India. This framework will allow us to innovate and operate freely while ensuring that the necessary guardrails are in place to safeguard the users," Gullapalli mentions. 

While the rules will determine the permissibility of certain games, Lokesh Suji, Director, Esports Federation of India, believes it will finally liberate Esports from the conflation with real money games. "We express our utmost gratitude to Hon’ble Shri Rajeev Ji & MeitY Team for the clear distinction between online gaming and real money gaming/iGaming under the new amendments made under the Information and Technology Act,” he adds.