Draft Rules for Online Gaming

2023 JAN 4

Preliminary   > Governance   >   Aspects of Good Governance   >   Governance

Why in news?

  • Recently, the Ministry of Electronics and IT (MeitY) has released the Draft Rules for Online Gaming.

About Draft Rules for Online Gaming:

  • The proposed rules have been introduced as an amendment to the Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021.
  • Self-Regulatory Body:
    • Online games will have to register with a self-regulatory body, and only games cleared by the body will be allowed to legally operate in India.
    • The self-regulatory body will have a board of directors with five members from diverse fields, including online gaming, public policy, IT, psychology and medicine.
    • There could be more than one self-regulatory body and all of them will have to inform the Centre about the games they have registered along with a report detailing the criteria for registering.
  • Due Diligence:
    • Online gaming firms will be required to undertake additional due diligence, including KYC of users, transparent withdrawal and refund of money, and a fair distribution of winnings.
    • For KYC, they will have to follow norms laid down for entities regulated by the Reserve Bank of India (RBI).
  • Random Number Generation Certificate:
    • Gaming companies will also have to secure a Random Number Generation Certificate, which is typically used by platforms that offer card games to ensure that game outputs are statistically random and unpredictable.
    • They will also have to get a “no bot certificate” from a reputed certifying body.
  • Restrictions on Betting:
    • Online gaming companies will not be allowed to engage in betting on the outcome of games.
  • Compliance:
    • Similar to social media and e-commerce companies, online gaming platforms will also have to appoint a compliance officer who will ensure that the platform is following norms, a nodal officer who will act as a liaison official with the government and assist law enforcement agencies, and a grievance officer who will resolve user complaints.

Add ons:

  • The revenue of the Indian mobile gaming industry is expected to reach USD 5 billion in 2025.
  • The industry grew at a compound annual growth rate (CAGR) of 38% in India between 2017-2020, as opposed to 8 % in China and 10% in the US.
  • It is expected to grow at a CAGR of 15 % to reach Rs 153 billion in revenue by 2024, as per a report by VC firm Sequoia and management consulting company BCG.
  • Around 40 to 45 % of the gamers in India are women.

PRACTICE QUESTION:

In the context of Draft Rules for Online Gaming under Information Technology Act, consider the following statements:

1. It mandates that online games have to register with a self-regulatory body

2. The rules prohibit online gaming companies from engaging in betting on the outcome of games

Which of the statements given above is/are correct?

(a) 1 only

(b) 2 only

(c) Both 1 and 2

(d) Neither 1 nor 2

Answer

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