New Rules for Online Gaming Companies [UPSC Notes]

Recently, the Union government announced that online gaming companies must act as digital intermediaries, weed out fake information, and comply with rules set by self-regulatory bodies. Read on to know more for the IAS exam.

New Rules for Online Gaming Companies:

• The Information Technology Rules have been updated to ban offshore betting ads and prevent gaming companies from promoting gambling. 
• The online gaming industry has faced challenges in regulating online gambling and fact-checking processes. 
• These changes aim to help India achieve its goal of becoming a one trillion-dollar digital economy by 2025-26.

What are the new IT rules for online gaming companies in India?

• The Indian government released the first version of the rules in January 2021 and worked with the industry to finalize them. 
• The final version requires online platforms to stop misleading or fake information from being shared. 
• Online gaming companies must act as digital intermediaries, check games and customers, remove fake information, and follow self-regulatory body rules. 
• The new rules also ban offshore betting ads and prohibit gaming companies from offering gambling. 
• Platforms must inform users of rules, privacy policy, terms of service, and user agreements, including KYC procedures and deposit protection measures. Rule 4A outlines the online real-money game verification process. 
• The government hopes these changes will help India reach its goal of becoming a one trillion-dollar digital economy by 2025-26.

What are the self-regulatory bodies, and who can join them?

• The government will select three self-regulatory bodies to make rules for the online gaming industry. 
• Trusts and for-profit organizations cannot apply, and there are specific requirements for the members who can join these bodies. 
• Existing industry groups will not qualify as self-regulatory bodies, and it may take up to eight months to form them, according to an industry expert. 
• The bodies must be registered under the Companies Act, have members from the gaming industry, and have a board of directors without a conflict of interest. 
• They must also publish a list of members, frameworks for verifying online real-money games, and a grievance redressal framework, along with contact information for a grievance officer. 
• They must update the list of allowed online real-money games and provide details about the applicant and the validity period of the verification.

How do the new rules impact the online gaming industry in India?

• The new rules encourage gaming companies to be more responsible and promote responsible gaming behavior. 
• Gaming companies must display a verification mark from an online gaming self-regulatory body to indicate that the game has been verified, and unverified games cannot be advertised.
• Although gaming companies receive intermediary protections under Section 79 of the IT Act, online gambling is still not considered legal. 
• The regulation of gambling is the responsibility of the individual states, and they have the power to regulate it within their borders.

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