New Guidelines for Online Gaming Companies

According to a recent announcement by the Union government, online gaming businesses must serve as digital middlemen, weed out false information, and adhere to self-regulatory organization guidelines.

New Guidelines for Online Gaming Companies:

  • To prohibit advertisements for offshore betting and to stop gaming companies from endorsing gambling, the Information Technology Rules have been updated.
  • Regulating online gaming and fact-checking processes has been difficult for the industry.
  • By 2025–2026, India wants a digital economy worth $1 trillion, and these changes are meant to assist with that endeavour.

What are the updated IT rules for Indian online gaming companies?

  • The Indian government worked with the sector to finalize the guidelines after releasing the early version in January 2021.
  • The final version calls for online platforms to prevent dissemination of false or misleading material.
  • Internet gaming companies must serve as digital middlemen, vet clients and games, eliminate false information, and adhere to self-regulatory body guidelines.
  • Also, the new regulations restrict gaming companies from providing gambling and offshore betting advertisements.
  • Users must be informed of the terms of service, privacy policy, user agreements, KYC procedures, and deposit protection measures by platforms. The verification procedure for real-money online games is described in Regulation 4A.
  • By 2025–2026, India wants a digital economy worth $1 trillion, and it thinks these improvements will help it get there.

What are self-regulatory organizations, and who is eligible to join them?

  • The government will choose three self-regulatory organizations to create regulations for the Internet gaming sector.
  • Trusts and for-profit organizations are prohibited from applying, and rules exist about who can join these groups.
  • According to an industry expert, building self-regulatory bodies from existing business associations could take up to eight months because they will not be eligible.
  • The organizations need to be incorporated under the Companies Act, including representatives from the gaming sector and have an impartial board of directors.
  • Additionally, they must make public a membership list, procedures for approving real-money online gaming, a grievance redressal system, and contact information for a grievance officer.
  • They must give information on the applicant and the validity period of the verification in addition to updating the list of permitted real-money online games.

What effects will the new regulations have on India's online gaming market?

  • The new rules urge gaming companies to practice responsible gaming and encourage it.
  • Unverified games cannot be advertised, and gaming companies must display a verification symbol from an online gaming self-regulatory agency to show that the game has been verified.
  • Online gambling is still not regarded as lawful, despite gaming companies receiving intermediary protections under Section 79 of the IT Act.
  • Each state is in charge of regulating gambling, and they have the authority to do so inside their borders.