The Indian government propagated a regulatory scheme for online gaming companies for the
first time ever. The rules include mandatory verification of players and physical locations for th
virtual bookies. Similarly, these gaming outlets will comply with the IT rules published in 2021 for all social media platforms.
The recent legislative laws in the Asian nation are meant to clamp down on juvenile addiction to
gambling, and also to draw a line between entertainment and betting among the youth. As
bettors check the predictions today, they need to know any wagers placed are with a legitimate
operator and not with a scam artist.
The Government’s Recommendations for the Online Gaming Platform
The online gambling industry in India is a pretty successful one, estimated at $1 billion in 2022.
But as things go, it’s projected to reach $5 billion in 2025, hence the need to have the future of
the enterprise in place.
Last year, a government panel said in a report to an international news outlet, “India should
create a regulatory body to classify online games as based on skill or chance, introduce rules to
block prohibited formats, and take a stricter stance on online gambling.”
These are the regulatory intentions provided by the panel:
- The IT ministry would act as the central ministry for online gaming, except for e-sports and
games of chance.
- Any new legal framework should apply to real money and free games of skill, including
esports, online fantasy sports, card games, and other casual games that may impose a
significant impact. The rules would apply to gaming companies in India and those operating outside but targeting Indian end users.
- The government should consider postulating a separate law to regulate online gaming as a
“long-term measure.” As an “interim industry.” Until such a new law is enacted, the industry can be controlled through rules drafted under existing IT law.
- The creation of a regulatory body for the online gaming industry, which among other things, will determine what qualifies as a game of skill and certify different gaming formats.
- There should be a three-tier dispute resolution mechanism consisting of gaming platforms,
self-regulatory gaming media bodies, and an oversight committee led by an appropriate ministry.
- The inclusion of provisions for a “Code of Ethics” for the gaming publishers; have due
diligence of online gaming platforms, including a robust grievance redressal mechanism and mandatory know-your-customer norms.
- Lastly, any online gaming platform offering real money online games to users should have a legal entity incorporated under the law. Provide blocking powers for the government to deal with unregistered online gaming platforms.
Gambling Sites to Be Monitored Under IT Rules
A notice was recently issued to the Ministry of Electronics and Information Technology in India.
It states specific guides for online gaming platforms related to betting and the age of individuals
engaged in the act.
The notice begins with, “The draft amendments are aimed at addressing the said need while
enabling the growth of the online gaming industry in a responsible manner.”
The changes explain ongoing proposals that hint at the involvement of a third-party observer of
the various virtual media, according to the law. And the rules will ensure bookmakers do not
display, host, publish, upload, share, or transmit an online game that goes against the law of
In addition to the content of the notice, “Self-regulatory bodies will be registered with the ministry (Ministry of Electronics and Information Technology) and may register online games of such online gaming intermediaries who are its members and which meet certain criteria. Such bodies will also resolve complaints through a grievance redressal mechanism.”
These drafted instructions will force companies to be more cautious in their approach to
business as the regulatory body can revoke their “approved” status at any time. This status will
be an indicator to players that the operator is above board and compliant. Moreover, that will
guide users mainly in terms of policies related to withdrawal and refunds, distribution and
estimation of winnings, payable charges, and procedure for account registration.