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Online Gaming Regulatory approval faces deadlock as MeitY explores Direct Control

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The process of appointing self-regulatory bodies (SRBs) for the online gaming industry in India has reached to a stall, prompting the Ministry of Electronics and Information Technology (MeitY) to consider taking direct control over the approval mechanism for games and companies involved in online gaming. Union Minister of State for IT, Rajeev Chandrasekhar, revealed in an interview with Mint that only one application for SRBs had been received and was deemed unsatisfactory. MeitY is now contemplating assuming regulatory responsibilities, with a decision expected in the coming weeks.

The appointment of SRBs, initially proposed in an amendment to the Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021, has encountered hurdles. The rules aimed to involve SRBs in approving entities for advertising and operating titles targeting Indian users, particularly those involving real money transactions. Despite initial plans to appoint three SRBs, the process has faced delays, raising uncertainty about the future regulatory framework for the online gaming sector.

Insiders familiar with the matter, requesting anonymity due to the ongoing discussions within MeitY, disclosed that alongside the challenges in forming SRBs, the decision to establish a group of ministers to oversee a regulatory framework for the industry has been delayed. These decisions were reportedly made in December following discussions within the Prime Minister’s Office.

Chandrasekhar acknowledged the lack of progress on SRBs and hinted at MeitY’s potential intervention. Expressing concerns about industry dominance on the SRBs, he emphasized the government’s commitment to preventing SRBs from being influenced by the gaming industry. While Chandrasekhar clarified that no final decision had been made to transfer regulatory power back to MeitY, the consideration is under discussion.

The SRBs were initially seen as a positive step for the legal certification of online gaming firms, allowing them to advertise on social media platforms legally. This move would distinguish legal online gaming from illegal betting and gambling services, aligning with an advisory from the Ministry of Information & Broadcasting issued on August 25. The advisory stated that only ‘permissible’ online games could advertise on social media intermediary platforms.

However, the challenges in selecting suitable SRBs and ensuring their independence from industry affiliations have cast uncertainty over the regulatory landscape for online gaming in India. The discussions remain tentative, and the government continues to take immediate action against any reported illegal betting apps while deliberating the most appropriate regulatory path forward.

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