All You Need To Know About Online Gaming Regulations In India

With the advent of the Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021 (“Rules”) as updated by the Ministry of Electronics and Information Technology (“Meity”) on April 6, 2023 following rules have been implemented in relation to online gaming in India:-

1. What is an online game: the definition of an online game has been simplified and broadened to include a “game that is offered on the internet and is accessible by a user through a computer resource or an intermediary”.
2. What is an online real money game: Online real money game involves a game wherein a user makes a deposit (either in cash or kind) with the expectation of earning winnings on that deposit. As per the Rules, online real money game is not permissible unless verified by an online gaming self regulatory (see point D)
3. What kind of online game is permissible: Under the Rules, only online games which do not involve wagering or betting on any outcome and permissible online real money games are permissible.
4. When can an online real money game be verified: After conducting an enquiry, self regulatory bodies (designated by Meity as per the Rules) may declare an online real money game as a permissible online real money game, if it is satisfied that:-
• it does not involve wagering on any outcome;
• it is not against the interests of sovereignty and integrity of India, security of the State, friendly relations with foreign States and public order;
• contains the safeguards against user harm/self-harm and psychological harm;
• includes measures to safeguard children such as for parental/access control, classifies online games through age-rating mechanism, based on the nature and type of content;
• includes measures to safeguard users against the risk of gaming addiction, financial loss and financial fraud;
• such online gaming intermediary observes due-diligence as well as additional due diligence as mentioned in the Rules and contain provisions of any law relating to the age at which an individual is competent to enter into a contract;
 
5. Who is an online gaming intermediary: means any intermediary that enables the users of its computer resource to access one or more online games.
6. Specific obligations of the online gaming intermediary: Rules under the provisions of due-diligence and additional due-diligence contains certain obligations specifically to be followed by online gaming intermediary and the same are as follows:-
• shall inform its users and make reasonable efforts to not display, upload, modify, publish, transmit, store, update or share any information that is in the nature of an unverified online game;
• notify its users regarding a change which enables them to assess a permissible online real game as soon as possible, but not later than twenty-four hours thereto;
• appoint of Grievance Redressal Officer, Chief Compliance Officer and Nodal Officer;
• have a physical address in India and the same shall displayed on its website or mobile application;
• implement an appropriate mechanism for the receipt of complaints under Rule 3(2) of IT Guidelines and grievances in relation to the violation of provisions of Rule 4A. It also requires the online gaming intermediary to provide reasons for any action taken or not taken, pursuant to complaints/grievance received by it;
• implement a mechanism for voluntary verification of accounts by users in India, including an active Indian mobile number and distinguish such users with a visible mark of verification which shall be accessible to all users of the service;
• display visible mark of verification in relation to online real money game provided by self regulating body;
• include (i) policy related to withdrawal or refund of the deposit by the user and the manner of determination and distribution of such winnings, fees and other charges payable by the user and measures taken for protection of such deposit; (ii) KYC procedure for user’s verification; (iii) framework for verification of an online real money game (see point D);
• prior to accepting any any deposit in cash or kind from any user for a permissible online real money game, the online gaming intermediary shall identify and verify details of its users as per the KYC procedure laid down by Reserve Bank of India;
• an online gaming intermediary which enables the access to users for a permissible online real money game shall not by not itself finance by way of credit or enable financing to be offered by third parties for the purpose of playing such online game;
• Shall provide information under its possession or control within 24 hours from receipt of a written order for the purpose of seeking information or assistance to the government agency.
Rule 3 and 4 of the Rules which includes the aforesaid obligations shall apply to the online gaming intermediaries upon expiry of a period of three months from the date on which at least three online gaming self-regulatory bodies have been designated by Meity. However, the central government at any time (before the expiry of three months) declare applicability of the aforesaid obligations by way of a notification.
7. Obligation on intermediaries qua online gaming: Rules require an intermediary to inform its users and make reasonable efforts to not display, upload, modify, publish, transmit, store, update or share any advertisement/surrogate advertisement/promotion of an unverified online game, or of any online gaming intermediary offering such an online game.
 
8. Non-observance of the Rules: If any intermediary, including an online gaming intermediary fails to observe the Rules or provisions of Section 79 of the Act it shall be liable for punishment under any law for the time being in force including the provisions of the Act and the Indian Penal Code, 1860.