Online gaming industry welcomes amendments to IT Rules announced by MeitY today

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Rajeev Chandrasekhar, the Minister of State for the Ministry of Electronics and Information Technology (MeitY), announced the amendments to IT Rules, 2021 in a press conference in New Delhi today.

The IT Rules were released in early January of this year following which the ministry sought suggestions and conducted consultations and meets with various stakeholders. After more than two months from the conclusion of the consultations, MeitY finally released the amendments today.

The online gaming industry has welcomed the amendments. Roland Landers, CEO, All India Gaming Federation (AIGF), said: “As the oldest, largest, and most diverse industry association for online gaming in the country, we are grateful to MeitY for notifying the amendments to regulate online gaming under the Indian Information Technology Act, and acknowledging the long-standing demand of the gamers and the online gaming industry. We are especially grateful that the Government recognised the industry demands and provided light touch, but comprehensive regulations, which will support innovation, boost Create in India and Brand India, and propel India’s Techade.”

“These rules will go a long way in promoting consumer interest while helping the industry grow responsibly and transparently and will also help in curbing the menace of anti-national and illegal offshore gambling sites, which have been proliferating in the last few years,” Landers added.

Sai Srinivas, CEO and Co-Founder, MPL, expressed his delight on the latest announcement, saying, “The release of the new online gaming rules is a watershed moment for the industry, as it recognizes online gaming intermediaries and distinguishes them from gambling. The uniform legal framework provided by these rules will boost investor confidence. We anticipate that this will also help reduce regulatory fragmentation at the state level as also mentioned by the Hon’ble Minister, create a more stable business environment and weed out gambling platforms.”

Jaya Chahar, Founder and CEO of TFG, also welcomed today’s announcement, suggesting that the appointment of SROs will help in drawing a clear line between legitimate and illegal platforms.

“The appointment of SROs is a welcoming and firm step by MeitY towards regulating the online gaming space. The appointment will eliminate the confusion between legitimate online gaming players and offshore betting websites. This will bring further clarity to the Indian gaming industry which is at the cusp of exponential growth,” said Chahar.

Eminent Technology and Gaming Lawyer, Jay Sayta, also welcomed the amendments largely and noted that it will be very difficult for illegal offshore betting platforms to operate and promote themselves in the country now.

“According to the new rules, intermediaries such as hosting providers, news websites, social media websites, search engines etc. cannot host any game that is not recognised as a permissible online game by a self-regulatory body (primarily targeted at offshore betting portals) and cannot publish any advertisement or surrogate advertisement or promotion of an online game that is not a permissible online game (i.e. gambling/betting games or platforms),” said Sayta.

“The new rules are therefore expected to curb the menace of illegal offshore betting and gambling websites and their surrogates that are openly flouting the law and advertising through various means. The new rules would help in stopping promotional content of offshore betting websites and pave the way for swift blocking of domains and websites/apps engaged in illegal gambling or betting,” Sayta added.

However, Sayta also pointed out that the rules do not clearly distinguish between skill-based and chance-based games and so whether staking money on the former will be permitted or not.

“The rules do not clearly define online real money games to be games involving predominant or substantial degree of skill and the rules do not clearly demarcate games involving substantial degree of skill, which are legal and constitutional activities as separate from games of chance or gambling/betting activities,” said Sayta.

“The problem is compounded further by the fact that the rules leave decision as to the permissibility of a game to be legitimate game to the vagaries of ‘Self-Regulatory Bodies’ who are further required to not permit any online real money game that involve ‘wagering on any outcome’. Compounding the confusion, the central government has not clarified or made any provision in the rules that clarify or state that staking money on games classified as skill-based games would be permitted,” Sayta concluded.