Govt Moots Self-Regulatory Mechanism Within Legal Framework

The central framework would also put a pause to the knee-jerk blanket bans by states, said Saumya Singh Rathore, Co-Founder, WinZO Games.

NEW DELHI, Jan 2 (The CONNECT) – With a view to enabling the growth of the online gaming industry in a responsible manner, the Centre has proposed an industry self-regulatory mechanism.

Self-regulatory bodies will have to be registered with the Ministry 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, the government said releasing a draft policy for public feedback.

With the user base of online games growing in India, need has been felt to ensure that such games be offered in conformity with Indian laws and that the users of such games be safeguarded against potential harm, the Ministry of Electronics and Information Technology said.

The Ministry has prepared draft amendments to the Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021 which envisage that an online gaming intermediary shall observe the due diligence required under the rules while discharging its duties, including reasonable efforts to cause its users not to host, display, upload, publish, transmit or share an online game not in conformity with Indian law, including any law on gambling or betting.

Moreover, it shall observe additional due diligence by displaying a registration mark on all online games registered by a self-regulatory body and informing its users regarding its policy related to withdrawal or refund of deposit, manner of determination and distribution of winnings, fees and other charges payable and KYC procedure for user account registration.

Commenting on the draft policy, Saumya Singh Rathore, Co-Founder, WinZO games, said Indian online gaming woke up to a new era with MEITY recognizing the sector and putting up the proposed draft for public consultation today. While the industry would continue to expand in the coming years, driven by innovation in technology, growing culturally relevant IP creation, and increasing access to smartphones and high-speed internet in deeper Bharat, the requisite stability came just in time, she said.

The online gaming industry would significantly benefit from a stable policy framework that renders clarity on what is permissible. The sector would evolve to be more accountable and thus safer for the end consumers. The central framework would also put a pause to the knee-jerk blanket bans by states. A more predictable environment would attract increased investments, creating jobs and a new generation of the export industry from India.

Rathore said the sector, however, awaits GST clarity which stands as the biggest survival threat for the entire industry. The sector has over 1000 companies that are less than 24 months old and in the early revenue stages. “We are hoping the government will continue to encourage companies to invest in technology and IP creation and consider the survival of the sector by retaining 18% GST on the commission – the only sustainable taxable model,“ she said.