India is aiming for its $2 billion online gaming industry to grow responsibly through self-regulation, according to new draft rules.
Betting or gambling on online game outcomes is banned under the proposed regulations, as explained by iGaming Consultant Jaydeep Chakravartty.
The Ministry of Electronics and IT has issued a notice requiring online gaming companies to register with a self-regulatory authority to prevent such practices. The draft rules include a provision for a self-regulatory framework and player verification.
Self-regulatory bodies will be registered with the Ministry and may register online games of their members that meet certain criteria. These bodies will also address complaints through a grievance redressal mechanism.
Online gaming platforms are expected to comply with national laws. "The draft amendments are aimed at addressing this need while enabling the growth of the online gaming industry in a responsible manner," the Ministry stated.
Online Casino News India: Regulations for Online Gaming Intermediaries in India
Online gaming intermediaries must adhere to the due diligence requirements set forth in the regulations. This includes making reasonable efforts to ensure that their users do not host, display, upload, publish, transmit, or share online games that violate Indian laws, including those related to gambling or betting.
In addition, online gaming companies should display a registration mark on all online games licensed by a self-regulatory body. They should also inform users about their withdrawal and refund policies, the process for distributing winnings, and any applicable fees and costs.
Companies must also establish a Know Your Customer (KYC) procedure for user account registration.
Self-regulatory bodies will be registered with the Ministry and may register online games of their members that meet certain criteria. These bodies will also provide a grievance redressal mechanism to resolve complaints, as stated in the notice.
Online Casino News India: Self-regulation Draft to be Finalised by February
The public has until February 17th to provide feedback on the draft rules.
Online gaming intermediaries will be permitted, but not if they engage in betting. "Our intention is to restrict intermediaries from advertising without permission," said federal minister Rajeev Chandrashekhar.
The final version of the regulations for online gaming is expected to be released in early February, and its purpose is to promote the responsible expansion of the online gaming industry.
Chandrashekhar explained that the government's role is to ensure the safe and trusted functioning of the internet and to ensure that online gaming intermediaries do not allow wagering on the outcome of games.
The federal government plans to impose a 28% Goods and Services Tax (GST) on the total amount, rather than the current 18% on the online gaming industry's Gross Gaming Revenue (GGR). The 28% GST is a service charge fee that facilitates players' participation in the game.
Recently, e-sports and mainstream sports have gained recognition from the government. Chandrasekhar told Parliament that with more Indians coming online, the potential for them to be exposed to online gaming platforms with harmful information has increased.
Online Casino News India: Industry to Reach $5 Billion by 2025
The government's efforts to establish a self-regulatory authority strongly signal that it wants to encourage the online gaming industry, worth $2 billion, to grow in a regulated and orderly manner. By 2025, the industry is expected to reach $5 billion.
The self-regulatory authority will provide a reliable and timely grievance redressal process and register online gaming intermediaries while promoting responsible gaming through age verification. Additionally, there will be a strict KYC process, as well as precautions against addiction and financial distress.
This move will support responsible gaming while helping the government promote a regulated and sustainable business. The regulations will go a long way toward ensuring consumer interests are protected while promoting the industry's responsible and transparent growth.
Transparent and strict self-regulation will also help to minimise the threat posed by anti-national and illegal offshore gambling platforms. Roland Landers, CEO of the All India Gaming Federation, welcomed the draft regulations, saying: "We are grateful to the government for acknowledging the long-standing need of the gamers and the online gaming industry. We believe this is a great first step toward comprehensive regulation for online gaming."