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India's Online Gaming space:

The Ministry of Electronics and Information Technology (MeitY) recently notified new regulations for online gaming in India. The regulations, which came into effect on April 6, 2023, aim to regulate the online gaming industry in India. The inclusion of Online Gaming Intermediaries in the IT (Intermediary Guidelines & Digital Media Ethics Code) Rules, 2021, is a significant development and gives a clear idea of the government’s approach towards Online Gaming Intermediaries. The Government needs to provide clear guidance on taxes and measures for consumer protection. With proper regulations in place, online gaming in India has the potential to become a thriving industry, providing employment and entertainment for millions of people.

Key Provisions on Online Gaming

1. Permissible online real money games- The regulations only allow online real money games that are verified by self-regulatory bodies (SRBs). SRBs are organizations that are set up by the online gaming industry to regulate itself. The Ministry of Electronics and IT (MeitY) has announced new regulations to protect online gamers from harmful content and addiction. A self-regulation model has been applied for the online gaming sector where SROs will approve the games that can operate in the country in accordance with the rules. These new online gaming rules have been included by way of an amendment to IT Rules of 2021. Further, the Indian Government defines an online game as “a game that is offered on the Internet and is accessible by a user through a computer resource or an intermediary.”

2. Duties of online gaming intermediaries- Online gaming intermediaries, which are platforms that host or facilitate online gaming, are required to comply with various obligations enumerated under Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021, which were issued by the Ministry of Electronics and Information Technology (MeitY) in February 2021 and updated on April 6th 2023.

Key laws and regulations on online game companies in India

1. The Information Technology Act, 2000: This Act regulates the use of electronic records and transactions in India. It includes provisions that are specifically designed to protect consumers using online services. It includes provisions on data protection, privacy, and cybercrime.

2. The Public Gambling Act, 1867: This Act prohibits gambling in India. However, there are a number of exceptions to the general prohibition, including games of skill.

3. The Consumer Protection Act, 2019: This Act protects the rights of consumers in India. It includes provisions on the collection and use of personal data by businesses. This Act also includes provisions that allow consumers to file complaints against companies that violate their rights.

4. The Juvenile Justice (Care and Protection of Children) Act, 2015: This law protects the rights of children in India. It includes provisions on the collection and use of personal data of children by businesses.

In addition to these laws and regulations, online game companies in India may also be subject to other laws and regulations, such as the Indian Contract Act, 1872.

Challenges for Gaming Industry in India:

The online gaming industry in India is growing rapidly, but it is also facing a number of regulatory challenges. Here are some of the challenges that online gaming companies in India are facing:

1. Addiction and fraud: There is a growing concern with respect to addiction and fraud in the online gaming industry. This is a challenge that gaming companies need to address in order to safeguard their consumers and also to avoid any serious repercussions such as ban in the country. Hence, companies will have to implement responsible gaming practices and take steps to prevent frauds.

2. Varying State laws: The laws governing online gaming in India vary from State to State. Some more stringent than the other, this can make it difficult for gaming companies to operate across the country, as they need to comply with the laws of each State.

3. Lack of clarity in the law: The laws governing online gaming in India are not clear, and this creates uncertainty for gaming companies specifically pertaining to privacy laws and taxation. For example, the privacy protection framework for online gaming in India is still evolving. The bill was introduced in the Lok Sabha (lower house of the Indian Parliament) on December 11, 2019, and is currently still under consideration. There have been changes proposed in GST regime which can impact the industry grossly.

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