Govt proposes policy on online gaming; wagering not allowed

Context

Recently, the Central government has proposed several policy measures for regulating the Online gaming industry, with a self-regulatory body, grievance redressal mechanism, and mandatory know-your-customer norms for verification are among the key proposals in the draft rules.

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The proposal aimed at safeguarding users against potential harm from skill-based games.
- Around 40 to 45 per cent of the gamers in India are women, and therefore it was all the more important to keep the gaming ecosystem safe.
To regulate online gaming platforms as intermediaries. Like an intermediary, online gaming firms will be required to undertake additional due diligence, including:
- KYC of users
- transparent withdrawal and refund of money
- a fair distribution of winnings
The proposal has been introduced as an amendment to the Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021.

Key points from the proposal:

Online games will have to register with a self-regulatory body.
Only games that are cleared by the body will be allowed to legally operate in India.
Online gaming companies will not be allowed to engage in betting on the outcome of games.

Nodal Ministries:

Ministry of Electronics and Information Technology (MeitY)would be the nodal ministry to regulate online gaming, except for the e-sports category on which the Department of Sports can take the lead.
Certain other aspects of online gaming such as advertisements, code of ethics relating to content classifications, etc. could be regulated by the Information and Broadcasting Ministry.
The Consumer Affairs Ministry can regulate the sector for unfair trade practices.

About Self-Regulatory Body:

It will have a board of directors with five members from diverse fields including online gaming, public policy, IT, psychology, and medicine.
There could be more than one self-regulatory body.
It must ensure that the registered games don’t have anything:
- which is not in the interest of the sovereignty and integrity of India
- defense of India,
- security of the state
- friendly relations with foreign states
- public order
- incites the commission of any cognizable offence relating to the aforesaid.

Online Gaming Market in India:

Current state: India’s gaming market is currently estimated at $2.6 billion and is expected to be worth $8.6 billion by 2027.
Market growth: The online gaming industry in India grew at a compounded annual growth rate (CAGR) of 38% between 2017-2020, as opposed to 8% in China and 10% in the US.
New user base: India’s percentage of new paying users (NPUs) in gaming has been the fastest growing in the world for two consecutive years, at 40% in 2020 and 50% in 2021.
Revenue generation: The revenue of the Indian mobile gaming industry is expected to reach $5 billion in 2025.

Banning of Online Gaming:

Many social activists, government officials, and those in law enforcement believe that online games like rummy and poker are addictive in nature, and when played with monetary stakes lead to depression, mounting debts, and suicides.
Earlier, the World Health Organisation (WHO) had announced a plan to include “gaming disorder” as a mental health condition.