Govt releases new rules for online gaming, prohibits wagering

The Ministry of Electronics and Information Technology (MeitY) has issued the Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Amendment Rules, 2023, which amends the Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021. The new regulations introduce a framework of multiple self-regulatory organisations (SROs) and prohibit any game that involves betting or wagering.

Prohibition on wagering in online gaming

The government of India has released new rules for online gaming that will prohibit any game that involves betting and wagering. Minister of State for IT, Rajeev Chandrasekhar, stated that online games involving wagering or betting would be in violation of the new online gaming rules.

The new rules define an online gaming intermediary as any intermediary that "enables the users of its computer resource to access one or more online games". The additional provisions provide the regulatory framework for online gaming and misinformation. There will be multiple self-regulatory organisations, and these SROs will have participation from all the stakeholders, including but not limited to the industry.

The permissibility of online games will be determined based on whether they involve wagering. If wagering is involved, the SRO will declare the game as not permissible. While the 2021 rules covered social media intermediaries, the 2023 amendments substituted the terms "social media intermediary and significant social media intermediary" with "a social media intermediary, a significant social media intermediary and an online gaming intermediary."

Prohibition on non-permissible online games

The new amendments focus on ensuring that no wagering or betting on the outcome of any online game is allowed, and prohibit online gaming intermediaries from hosting or allowing users to use their resource to host:

an online game that is not verified as a permissible online game.

advertisement or surrogate advertisement or promotion of non-permissible online game or any intermediary offering such an online game.

Fact-checking and verification

The fact-checking body, MeitY, will soon notify that it will carry out the above-stated functions, of verifying that the intermediary is not hosting non-permissible online real money games or misleading advertisements.

The amendments equate gambling with an online game that causes user harm. The 2023 amendments make it the online gaming intermediary's responsibility to display a "demonstrable and visible mark of verification" of a real money online game by an online gaming self-regulatory body.

Verification and Compliance

Before accepting any deposit in cash or kind from any user for a permissible online real money game, the online gaming intermediary must identify the such user and verify his identity. It is also required to clarify the policy related to the withdrawal or refund of a user's deposit, the manner of determination and distribution of winnings, fees, and other charges payable by the user.

Self-regulatory bodies for online gaming

The draft specifies that the Centre can constitute as many online gaming self-regulatory bodies as it may consider necessary to verify an online real money game as a permissible online real money game. These self-regulatory bodies will be given the power to declare a game a "permissible online real money game," provided it does not involve wagering on any outcome and the online gaming intermediary and the game are in compliance with the law.