As the three-month deadline for the gaming industry to send proposals for self-regulatory organisations (SROs) ended July 6, the government has received two such proposals from gaming startups and companies, according to people aware of the matter.
The government will formally notify such bodies once it finalises the board structure and also selects its representatives who will be part of the five-member board of directors of the SROs as specified under the amended IT Rules, 2021. In the absence of a third concrete proposal so far, it is expected that the government might itself form an SRO complying with the structure in the IT rules, sources said.
As per the new rules, online real money games will become permissible only when it is verified by a self-regulatory organisation (SRO). For other online games which do not involve real money do not require any verification from an SRO.
Out of the two proposed SROs, one is a joint proposal by gaming companies such as Games 24×7, Dream 11, etc, that are part of e-gaming Federation (EGF) and the Federation of Indian Fantasy Sports (FIFS). For the board structure, the SRO proposal included a retired Supreme Court judge, a cybersecurity expert, psychologist, among others. The other proposal is by the members of All India Gaming Federation (AIGF), which includes gaming firms such as Gameskraft, Nazara, etc.
“The proposals have been submitted. Discussions are going on with regard to the board structure, timelines for issuing certification to games that will apply for approval, criteria on which the games will be tested, etc,” an official said, adding that the focus is to first analyse the proposals received so far and get started.
The government will initially notify three SROs. The structure of SROs will involve government-approved entities including people with experience in online gaming, an educationist, an expert in the field of psychology, individuals dealing with protection of child rights, an individual with experience in the field of information and communication technology, and other relevant officials to be notified by the government.
By the time, the SROs are not notified, the government of India will take the decisions regarding what is permissible or not, minister of state for electronics and IT Rajeev Chandrasekhar had said.
“We are starting with three SROs…but there will be multiple SROs. The real issue is to do with real money gaming and there are other aspects of the rules that talk about KYC when money is involved, to address the issue of money laundering with many online gaming platforms,” Chandrasekhar had said at the time of amendment to IT rules for online gaming in April.
As per the rules, the SROs will have to come up with a framework to define the content of an online game in a view to safeguard users against harm, ensure that online gaming companies are taking measures to safeguard children, companies are mandatory specifying risk of gaming addiction and financial loss through repeated warning messages at higher frequency beyond a reasonable duration for a gaming session etc, and measures to safeguard against the risk of financial frauds.
The online gaming companies will also have to display a mark of verification by the self-regulatory body on such games, inform their users of the policy for withdrawal or refund of deposit, manner of determination and distribution of winnings, fees and other charges payable, obtain the KYC details of the users, and not giving credit or enabling financing by third parties to the users.