Rakesh Maheshwari discusses amendments to IT Rules 2021, their impact on online gaming industry

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In April, Ikigai Law conducted an interview with Rakesh Maheshwari, former Senior Director and Group Co-ordinator, Cyber Laws and Data Governance, Ministry of Electronics and Information Technology (MeitY), discussing the latest amendments to IT Rules 2021.

Maheshwari shed light on how the amendments were drafted and the role played by the online gaming industry. He also talked about the aspect of wagering and how the amendments will impact the different state laws along with sharing his own views on the online gaming policy.

Here are the snippets of the interview –

How did the amendments come to be?

Maheshwari said that the online gaming industry and stakeholders approached MeitY with concerns ranging from problem in differentiation between betting and gambling, which games are skill-based and which ones are chance-based.

Looking into the concerns, MeitY found that the previous rules were not par with the rapid growth of the industry and had to be amended for player safety. The real money gaming (RMG) sector, especially, had to be regulated properly.

What were the concerns raised?

The biggest concerns raised were regarding the illegal offshore betting firms still being able to operate using different methods despite being banned. Other concerns included bot-free online gaming with no RNG factor to ensure player safety and fair gameplay. Another thing that was focused on was the need for a proper grievance redressal mechanism.

Furthermore, talking with gamers, MeitY realized that not all RMG are gambling. The potential and importance of the online gaming industry is not only in an entertainment or recreational sense but also in a sporting sense as players can represent the country in esports tournaments at the international level.

What does wagering pertain to under the new rules?

Maheshwari stated that wagering on any outcome, be it games of skill or games of chance, will not be allowed. The courts have already ruled that only games of skills will be allowed and games of chance, which come under the definition of betting and gambling, will be the states’ prerogative.

How will MeitY look into the functioning of SRBs?

MeitY has specified who will be on the board of directors of SRBs and will be taking the decisions especially when there is a game that needs to be assessed if it performs all due diligence properly.

Is the presence of all board members required to verify games?

Maheshwari said that the final decision will have to be taken by the board, but there will be technical committees that will be supporting the it in evaluating the games and the applicant member to ensure they follow proper guidelines before being available to people.

What does MeitY think of states forming their own gaming laws?

The states have the freedom to make their own laws relating to betting and gambling but in case of a conflict between the new laws and the state laws, the state laws will have more authority. However, Maheshwari believes that the way the new rules have been made, online gaming will be managed by the Centre and gambling by states.

How will self-regulation work?

The board members would be entrusted to take appropriate decisions following the laying down of rules by the SRBs. A proper grievance redressal mechanism, along with the online gaming industry working responsibly as per the framework developed, are keys for effective self-regulation.

How will the online gaming industry help the nation achieve the goal of becoming a trillion-dollar economy?

Maheshwari said the rules give flexibility to the online gaming industry. If regulated properly, there is a huge growth potential which some reports have also suggested. Combined with the growth plan for the AVGC sector, the new rules and proper taxation policies, the online gaming sector will help India reach the trillion-dollar economy goal.