Broadband India Forum (BIF) has appreciated the Ministry of Electronics and Information Technology (MeitY) for releasing draft ‘Online Gaming Rules’ and holding public consultations on the same. BIF believes the draft has important subject of tremendous long term potential to generate huge revenues for the national exchequer, leading to a surge in demand for 5G, increase in broadband traffic and penetration, while inculcating a renewed sense of responsibility with accountability amongst gaming intermediaries towards their users.
However, there are certain areas which may require some consideration including the definition of online gaming more clearly dealing with present modes of consideration and deposits in online gaming, know-your-customer (KYC) provisions to be balanced, need for duly empowered oversight body so that self-regulatory bodies/organisations (SRO) are accountable, provision for code of conduct for SRO and clarity that proposed rules do not apply to app stores and marketplace platforms which are themselves not engaged in online gaming.
Industry estimates suggest that there are around 20,000 games from Indian companies on the Google Play Store across different categories. Given the size and scale of the industry, it is recommended that online games are clearly defined more particularly in respect of elements of consideration, which may be in the form of service fee/commission charged by gaming intermediary for provisioning or facilitating or organising the online gaming service to the users in addition to the deposits towards prize pools.
To ensure prevention of hosting/publishing and advertising of unauthorised/ offshore betting and gambling platforms, Rules provide a safeguard to only host/publish and advertise registered games with SRB. This is a positive step as it will ensure the distribution of gaming applications majorly through ‘app stores’ will safeguard user’s interests, privacy, safety from malware and bad actors compared to side loading or other dubious or unsafe channels.
Stringent mandate for doing full KYC verification for first time users or those who are just signing up/creating temporary accounts, merely to have a look and feel of the platform or access any free-to-play games, appears to be too excessive and should perhaps be substituted by a staggered/tiered approach towards KYC and be made mandatory only for users completing/carrying out financial transactions beyond a certain threshold and that too at the time of withdrawals. As most of the online gaming intermediaries are start-ups which are in the early/middle stages of growth, they should be permitted a phased implementation programme with a sufficient time frame of 24 months to ensure full compliance.
Meanwhile, BIF strongly believes that it is imperative for these rules to provide for an oversight and appellate mechanism for disputes that may arise between online gaming intermediaries and the self-regulatory bodies. This appellate mechanism can also serve as the third-tier for dispute resolution for the users, thereby further strengthening the consumer protection framework within the rules. Creation of an oversight body is crucial to ensure openness, transparency and accountability in the online gaming ecosystem.
The draft rules provide for creation of multiple self-regulatory bodies. To ensure that there is uniformity in the processes and due-diligence requirements adopted by these self-regulatory bodies, it may be important for the central government to prescribe a code of conduct that provides general guidelines on the governance and administration for the self- regulatory bodies. Such a code of conduct will also deter online gaming intermediaries from engaging in “forum shopping” by ensuring that all self-regulatory bodies adhere to a common set of guiding principles. In addition, BIF also requests that rules should help in a fair and transparent registration process with SROs, safeguarding innovation of the online gaming intermediaries until the games are launched.
Sharing his views, TV Ramachandran, president, BIF, said, “The draft Online Gaming Rules provide a great fillip to the promotion of online skill-based gaming which is expected to be one of the biggest drivers of demand for broadband and help realise the vision of the Prime Minister to help India tap the multi-trillion dollar opportunity and lead the international gaming sector.”
