India: Inter-ministerial iGaming task force likely to introduce spending limits in upcoming regulatory framework

An inter-ministerial group, set up by the Ministry of Electronics and Information Technology (Meity) and tasked with drawing up a framework to regulate online gaming, is likely to introduce rules governing the amount of money individual players spend on a game. According to recent reports, the group could also set a limit on the money spent daily by players on in-game purchases, to ensure "consumer and gamer protection.”

The seven-member inter-ministerial task force, which was set up in May, is comprised of members from the Niti Aayog, as well as secretaries of the Ministry of Home Affairs, the Department of Revenue, Department for Promotion of Industry and Internal Trade, the Ministry of Information and Broadcasting as well as the Meity secretary.

As reported by the Economic Times, the draft regulations are likely to be finalized over the next month and will then be brought out for public consultation. At a meeting earlier this month, the ministerial grouping had suggested that Meity amend the Information Technology Act of 2000 to include rules for the gaming sector, similar to how the Intermediary Guidelines and Digital Media Ethics Code were introduced in February 2021, a government official told ET.

"The Rules for Gaming under the IT Act will also contain the clauses on self-regulation," people familiar with the matter said noting that the gaming sector has already been directed to come up with a self-regulatory organization (SRO) that can look into and adjudicate various aspects related to online gaming.

"Gaming is not really a homogenous group. Gaming companies are almost always led by young innovators. But that does not mean that for the next five years the industry will work solely on trust, hope, and chance. There need to be concrete regulations," one official told the cited source, adding that the government is happy to support an industry-led SRO. "But it should not be a toothless body," they noted.

Thus far, Meity has rejected the first two proposals for an SRO and has asked industry representatives to rework the clauses, according to a senior government official.

According to officials, the proposed SRO could be a five or seven-member body headed by a retired judge from the Supreme Court or one of the high courts. "It is also proposed that there be representatives from the central government, members from the industry as well as technical experts from various fields such as law or human rights among others," they added.

The officials further explained that it could be similar to the self-regulatory body proposed by the Internet and Mobile Association of India (IAMAI) for social network intermediaries, Economic Times adds.

In addition to administrative and advisory roles, the industry-led SRO should also be able to decide whether a game is a game of skill or of chance, and issue content take-down notices whenever needed, they noted.

At an earlier meeting on June 7 between representatives from gaming companies and senior officials from the IT ministry, including Minister of State Rajeev Chandrasekhar, the sector was asked to draw up comprehensive policies on various aspects including an objective definition of games of skill and chance, a senior official told EC.

"Gambling is a serious offense. But there is a very thin line between skill and chance and there are multiple arguments on both sides. The SRO should have powers to decide that if a game is trespassing into the game of chance and therefore gambling, there must be statutory powers to take them down," a second official said.

At the meeting with Meity, representatives from nearly 40 online gaming platforms expressed concerns about the varying regulations announced by state governments such as Karnataka, Tamil Nadu, and Karnataka. Gaming firms such as Nazara Technologies; Galactus Funware Technology Private, which owns Mobile Premier League; and Sporta Technologies, which owns Dream11; along with members from the All India Gaming Federation, sought the establishment of a central regulatory framework that is "stable and predictable," to prevent "sudden shocks to the industry.”

Sources said that the IT ministry has also asked gaming companies to lay special emphasis on the safety and well-being of women gamers with the development of the industry. Online games have, over the last few years, faced flak for not having enough protective guardrails around them.