The Center has proposed an online gaming self-regulation agency a self-regulatory body to certify what is allowed as ‘online games’ in India and is ready to initiate public consultations on the draft Online Gaming Directive, said the electronic information technology (IT) Minister of State Rajeev said. Chandrasekhar at a press conference.
A draft will be published on Monday and consultations will begin next week. The final rule he is due in early February.
“This process is expected to start next week. We hope to have the final rules in place by early February,” he said. Gaming startups, companies, investors, and gamers will join the discussion.
The draft proposes requiring Indian online gambling companies to have a complaints mechanism and verification of players and physical Indian addresses. This comes days after the Ministry of IT was named the node ministry for online games.
Public comments on the draft are open until January 17th.
The rule does not say whether it relates to games of skill or chance, a matter of debate among industry insiders. “Games that allow or allow betting on the outcome are not allowed,” Chandrasekhar said, adding, “All online gambling establishments must register with an SRO who will determine the necessary actions based on their regulations. there is. “
The SRO will have a board of directors with five members from various fields including online gaming, public policy, IT, psychology, and medicine. The entity does not allow registered games to “do anything that is in the interest of the sovereignty and integrity of India, the defense of India, national security, friendly relations with foreign countries or public order, or commit any perceptible criminal act.” In association with”.
Games must comply with national laws, including gambling and betting regulations. The draft regulations also stipulate that all online games registered by an SRO will be marked with a registration mark.
The body will then provide membership to an intermediary, which will observe due diligence required under the rules, “including reasonable efforts to cause its users not to host, display, upload, publish, transmit or share an online game not in conformity with Indian law, including any law on gambling or betting”.
“Like an IT intermediary, the online gaming intermediary will be required to undertake certain additional due diligence, know-your-customer of users, transparent withdrawal/refund of money, distribution of winnings, fee, and also registration with the ministry, including the appointment of grievance and nodal officers, and formal redress mechanisms,” says Nakul Batra, associate partner, DSK Legal.
The online gaming intermediary shall prominently publish on its website, mobile-based application, or both, a random number generation certificate and a no-bot certificate from a reputed certifying body for each online game offered by it, along with relevant details of the same.
It will also appoint a grievance officer who will be its employee and a resident of India. Also, a chief compliance officer will be assigned to coordinate with law enforcement agencies in India.
“While these amendments reflect the government’s overall intent to bring the online gaming industry under regulations, the narrowing down of the definition of online games to those involving deposits, along with other focal points proposed to target games involving financial implications of users, prize money earnings, indicate that the government seeks to particularly cater to such online games in which users’ financial implications are likely to come into play,” says Kritika Seth, founding partner, Victoriam Legalis-Advocates & Solicitors.
“While such requirements are undoubtedly the need of the hour for the sector to thrive in the right manner and manage traffic on these platforms, the quantum of compliance may become a speed-breaker to the gaming industry,” says Batra. The industry by and large welcomed the draft.
“We believe this is a great first step for comprehensive regulation for online gaming and will hopefully reduce the state-wise regulatory fragmentation that was a big challenge for the industry. These rules will go a long way in ensuring consumer interest while helping the industry grow responsibly and transparently. These regulations are also a first step to curb the threat of anti-state and illegal offshore gambling platforms,” said Roland Landers, CEO of the All India Gaming Federation. E-Gaming Federation CEO Sameer Barde said:
Gaming Unicorn, co-founder, and co-CEO of Games24x7, Trivikraman Thampy, also believes this is a “step in the right direction” and will contribute to the sustained growth of the industry.
“This will strengthen the domestic legitimate online gambling industry and improve transparency, consumer protection, and investor confidence,” he adds.
Nitish Mittersain, co-managing his director and CEO of Nazara Technologies, said this ensures player safety and responsible gaming. But he adds that there are many details that need further investigation.
“There is a one-month consultation period. Until then, we will make our donations available to the government,” he adds.