By Malay Kumar Shukla

The online gaming industry in India has witnessed tremendous growth in recent years, with millions of users and significant revenue generation. This exponential growth prompted a need for effective regulation to ensure consumer protection, maintain ethical standards, and address potential societal concerns. To address these concerns and shape the regulatory framework of the growing sector, the ministry of electronics and IT (MeitY) recently notified rules for the online gaming industry. The new rules have been included as an amendment in the IT Rules of 2021.

A self-regulation model has been applied to the sector and the amendments require the setting up of multiple self-regulatory bodies (SRBs) that will approve the games that can operate in accordance with the rules. This came at a time when the surge in popularity of online gaming led the industry to become a billion-dollar market, attracting investments and creating job opportunities.

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However, despite the Centre’s new gaming rules and legal jurisprudence set by the Supreme Court and several high courts, Tamil Nadu banned legally permitted online skill gaming in the state. The legislation passed by the Tamil Nadu legislature incorrectly categorised poker and rummy as games of chance. In the past, states like Andhra Pradesh, Odisha, and Telangana have placed restrictions on online gaming under regulatory ambivalence. On the other hand, some states such as Sikkim, Nagaland, and Meghalaya have developed gaming laws and licensing regimes to regulate online games in their respective jurisdictions.

This regulatory maze makes it challenging for the online gaming industry to determine what’s legal and what’s not. While state laws are a great initiative, state-level regulations and the enforcement of activity on the internet, which navigates across the country and even international boundaries, is impossible. A patchwork of disparate state regulations only creates confusion and hinders the growth of the industry.

Given that online gambling is a state subject, there is no doubt that state governments are entitled to impose a ban on the same to protect consumers. But what is concerning is the efficacy and the extent of these bans. They only serve to encourage illegal gambling activity predominantly from offshore operators, inadvertently compounding the problem of the government.

Addressing these concerns, the central government has ushered in a new era of responsible online gaming through strict guidelines by notifying amendments to the IT Rules 2021. The new rules clearly indicate that online games that involve any kind of gambling (including ads) will be prohibited. In addition, SRBs will make sure that games follow guidelines to prevent user harm through various initiatives which will keep evolving with the needs of the times. The new regulations are intended to encourage responsible gaming, prevent user harm, and protect gamers from harm.

Looking at this pragmatically, it is evident that one comprehensive regulation ensuring consistency, coherence, and fostering a level playing field for businesses and players throughout the nation is the only effective means to regulate this industry. Given the dynamic nature of online games and the intricacies involved, it would be appropriate for the state and central governments to collaborate to achieve comprehensive and harmonised regulation.

This would enable state and central governments to establish a uniform framework that applies consistently across the country and eliminate discrepancies in regulations that can arise from different states enacting their own rules. A unified regulatory framework will foster a transparent and predictable environment for the online gaming industry.

Regulating online gaming requires significant resources, including technological and human capital. Collaboration between state and central governments will also facilitate coordinated enforcement efforts. Online gaming platforms often operate across state boundaries, making it challenging for individual state governments to effectively regulate and enforce compliance. By working together, authorities can share information, pool resources, and coordinate enforcement actions. This synergy will further enhance the ability to monitor and regulate the industry, ensuring compliance with regulatory guidelines and safeguarding consumer interests.

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Such a collaborative approach will not only promote responsible and sustainable growth of the online gaming industry but also ensure consumer protection, maintain ethical standards, and address societal concerns effectively. Ultimately, a synergistic approach between state and central governments will lay the foundation for a thriving and well-regulated online gaming ecosystem in India.

The writer is secretary, E-Gaming Federation