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India's fix for its online gaming indust... Oh. Self-regulation

House always wins

India's Ministry of Electronics and IT (MeitY) has released draft rules for public consultation on its gaming industry that include a proposed self-regulating system for select registered online gaming companies.

The move clarifies speculation surrounding India's intent to regulate the industry. When calls for oversight over the lucrative sector emerged early last month, the country vowed to regulate games involving money.

"The rules are simple – we would like the online gaming ecosystem to expand and grow and be an important catalyst to India's one trillion dollar digital economy goal by 2025-26. We also envision a bigger role for startups in the online gaming industry," minister Rajeev Chandrasekhar told reporters of the new draft rules.

Good luck devs, know-your-customer procedures are expected

The changes, which are implemented as an amendment to the Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, would require online games to register with the self-regulating body for clearance to operate in India.

The rules also include a grievance redressal mechanism for resolving complaints, public clarity on withdrawing money, refunds or winning distributions, and know-your-customer procedures. Companies must also elect a chief compliance officer to make sure rules are followed.

Chandrasekhar said the draft rules tighten betting and wagering regs, with wagering on the outcome of a game "effectively a no-go area."

It did not clarify what this meant for current operators of games of skill, although the All India Gaming Federation was broadly supportive of the move.

According to investment banking platform Maple Capital Advisors [PDF], India's gaming startups signed deals worth $1.6 billion in the first nine months of 2021, exceeding the total value of investments in the sector in the previous five years.

"The draft amendments envisage that an online gaming intermediary shall observe the due diligence required under the rules while discharging its duties, including reasonable efforts to cause its users not to host, display, upload, publish, transmit or share an online game not in conformity with Indian law, including any law on gambling or betting," said [PDF] MeitY in a document.

In December, Chandrasekhar said India had no plans to limit the amount of time youth are allowed to spend playing video games, a tactic aggressively employed by China.

At the time, the minister acknowledged violent content exposure had grown, as had its risks including addiction and financial loss. However, current regulations put the responsibility to avoid harm to children on online platforms and carriers.

On Monday, Chandrasekhar said in the future India could further regulate online gaming in a bid to keep additional violent, addictive and sexual content out.

"As of now, the age gating is 18 years and we would like to keep it that way and see if the present framework works to expand the innovation ecosystem around online gaming while keeping it safe and trusted for gamers," said the announcement from MeitY.

Chandrasekhar also shared concern for the safety and security of women, who he said comprised 40 to 45 percent of gamers. The minister said it was important to keep the gaming ecosystem safe for this cohort. ®

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