New Regulations for Online Gambling in India Imminent

A new licensing proposal for online gambling in India is officially here. Government asking for public comment – find out what’s happening! (Photo by Michael Burrows on pexels.com)

The Indian government has proposed a new set of regulations to regulate online gambling. These rules are expected to help keep players safe, prevent financial crimes, and protect children.

The Central government has been criticized for its lack of regulation. Several states have banned online gaming. Some state bans have been challenged in court. Other states, like Nagaland and Meghalaya, have regulated online gaming. Now the government is aware of the need to reform the industry and that a balanced approach is required.

As a result of the disconnect between the central government and states, a new process began last year in April via the Online Gaming (Regulation Bill, 2022), which sought to establish an online gaming commission. A panel of Prime Minister Narendra Modi’s top officials has been working to draft regulations for the online gaming industry by consulting with various stakeholders in the industry via two task forces to examine the sector. One focuses on defining legal contours, while the other would explore how to promote animation.

Now it appears that we are at the stage of a draft proposal to bring the regulatory framework to life. The All-India Gaming Federation said that the regulatory framework would help reduce state-level fragmentation.

The proposal, by the IT Ministry’ is to create self-regulatory bodies to which all online gambling companies will need to register. The framework will then control gambling on a variety of gambling games, including poker, rummy, and virtual sports fantasy league games. Although most of these games are exempt from so-called ‘Gaming Enactments’, India does not have a federal licensing regime for skill-based games.

Are there Tax Incentives? On top of the concern for its citizens, there is the huge tax incentives for the government. You will find covered in our previous report – new tax rates on gambling in India. With the industry predicted to be worth close to 600 billion rupees, of course tax is an obvious incentive.

Online Gaming to Now Be Regulated by IT Ministry

The Ministry of Electronics and Information Technology (MeitY) has appointed itself as the nodal ministry for online gaming in India.

It has taken up the responsibility of regulating illegal content and has been tasked with monitoring and ensuring compliance with laws. This is the first step in bringing the industry under a central regulatory framework. While there have been many state governments that have banned various games, such as rummy, fantasy sports and poker, the industry remains largely unregulated.

The government has sought public comments on draft rules to regulate online gaming by January 17. These amendments are meant to curb the menace of illegal offshore gambling platforms and to promote responsible gaming. They also ensure that the interests of consumers are well protected. Besides, they will help to strengthen investor confidence and enable the online gaming sector to grow responsibly.

Online gaming companies will be covered by a new set of IT rules. Under the new rules, online gaming intermediaries will be required to register with a self-regulatory organisation. A self-regulatory body would be registered with the IT ministry and its members would include a representative from the government and other relevant stakeholders. The Ministry would be responsible for providing guidance to the industry and making it aware of any upcoming changes. Likewise, it will have the authority to revoke a self-regulatory body’s registration.

Putting an End to Years of Unregulated Gambling Online

Online gaming has been an unregulated industry for a long time. It has created confusion and uncertainty for online gaming platforms. It has also fuelled gambling addiction. However, this may change soon. After meeting with the IT ministers of all states, Union Minister Ashwini Vaishnaw announced that the Centre has decided to re-form the industry.

The self-regulatory organisation will be an extension of the existing IT (Intermediary Rules and Digital Media Ethics Code) Rules, 2021. It will be a society registered under the Societies Registration Act, 1860. All the online games offered by online gaming intermediaries will have to be registered with the self-regulatory body. If any of the gaming firms fail to meet the requisite criteria, they could face prosecution, fines, suspension or have their permission to operate in India revoked.

Keeping User Informed about the Potential Dangers of Online Gambling

Online gaming firms should inform users about the potential dangers associated with the game and the risks of gambling addiction. The companies will also have to ensure that the games have been reviewed by a self-regulatory organisation. In case of any non-compliance with the rules, the Ministry of Justice will have the authority to direct the self-regulatory body to make necessary corrections. As part of the process, the self-regulatory body will be able to redress any complaints through a grievance mechanism.

The new framework will strengthen consumer protection and transparency and help to boost the legitimate domestic online gaming industry. In addition to promoting responsible gaming, the new rules will make it easier for online gaming firms to comply with Indian law.

By requiring the registration of online gaming intermediaries and the issuance of a no-bot certificate, the government is putting a stamp of approval on the industry.