In recent years, the gaming industry in India has gained unprecedented leverage in the entertainment world. In 2021, almost 50% of the internet users in India played online games, totalling around 433 million out of the 846 million total internet users. Approximately 35% of the population became online gamers in 2021. It is expected that the number of internet users in India will surpass one billion by 2023, and the number of online gaming users in India will increase from 481 million in 2022 to 657 million in 2025. Unfortunately, the regulations governing online gaming in India are unable to keep up with the speed with which online gaming has significantly evolved in recent years. Until recently, even a nodal ministry to regulate online gaming was not designated by the government, leading to dodging the issue of regulating online gaming to respective states under ambiguous provisions, which do not even define online gaming. In India, Public Gambling Act 1867, the Prize Competition Act 1954, certain offences under the Indian Penal Code, 1860 and the Lotteries (Regulation) Act, 1998 “indirectly” regulate the online gaming industry. The word “indirectly” is deliberately used as the law enforcing agencies in India misuse the provisions of these legislations to prevent online gaming under the garb of regulating it. Due to a lack of uniform central legislation to regulate the online gaming industry, agencies erroneously charge online gamers under the provisions of these acts leading to almost zero convictions. Unfortunately, law-enforcement agencies in India believe in the principle of “process is the punishment” to overcome the lacuna or gap in legislation. On the other hand, several States have enacted respective legislations to regulate online gaming and gambling. However, they are ineffective in dealing with the unregulated online gaming industry due to their lack of uniformity. For example, a person playing online chess by paying a token fee in one State of India can be characterised as a criminal in that State, whereas in another State, he will be considered an online athlete (a term used to define online gamers). This inconsistency is not only limited to the legislations enacted by respective States but has pervaded into judicial decisions also. There are umpteen conflicting judgments on the interpretation of the game of skill (which does not fall under gambling) and the game of chance (which falls under gambling). However, as every cloud has a silver lining, the ambiguities and conundrums in regulating online gaming have led to a consensus among various groups, such as State Governments, the online gaming industry, the Law Commission of India, and the Indian government think tank Niti Ayog, on the necessity of legislating a uniform law for regulating online gaming. In recent years, the Government of India has sought to regulate the gaming industry by taking several initiatives. In 2018, the Law Commission of India proposed a central legislation in its report titled “Legal Framework: Gambling and Sports Betting including Cricket in India”. In December 2020, Niti Ayog released a draft report proposing creating a “uniform national level safe harbour framework” for fantasy sports, which would also provide guidelines for determining which games are games of skill. However, Niti Ayog, instead of proposing a central legislation, proposed recognition of a single selfregulatory body for fantasy sports. The government’s seriousness in regulating online gaming is evident from allocating matters related to online gaming to the Ministry of Electronics and Information Technology (MEITY). By doing so, the government has designated MEITY as the nodal ministry to regulate online gaming. Against this backdrop, after considering input from various relevant government departments and other stakeholders, MEITY developed draft amendments to the Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021, which were issued under the Information Technology Act, 2000, in January 2023. One of the crucial features of the draft amendments is introducing a self-regulatory structure in the form of a self-regulatory body (SRO) comprising five members from diverse fields, including online gaming, public policy, IT, medicine and psychology. Overall, the draft amendments to the IT (Intermediary Guidelines and Digital Media Ethics Code) Rules 2021 represent an attempt to strike a balance between the needs of the online gaming industry and the concerns of society. While some have praised the measures as necessary to protect players and ensure the online gaming industry’s integrity, others have raised concerns about the potential for overregulation and the impact on innovation and entrepreneurship. Nevertheless, the draft amendments are not free from potential drawbacks such as censorship, privacy concerns, economic impact and freedom of expression. However, it would be too early to comment on the same. But the most critical drawback is the lack of distinction between “games of skill” and “games of chance.” The draft rules apply to all online games, regardless of whether they are considered games of skill or chance, as the government is keen on not distinguishing the same in consonance with global practice. Further, the Self-Regulatory Organization (SRO) model for regulating online games may be problematic because requirements for registration are not clear. It is relatively straightforward if registration of an intermediary involves paying a fee, becoming a member, and following rules and regulations that require companies to offer only games of skill. The apprehension is that the SRO under the draft rules may also act like the SRO of other online platforms, such as Over-TheTop (OTT) players, where the SRO only provides registration for a fee and require adherence to specific terms and conditions rather than certifying what content can or cannot be shown on those platforms. Thus, the absence of distinction may lead to unscrupulous elements pushing games of chance, leading to gambling in online platforms under the guise of gaming, which will harm the country’s youth, leading to addiction and financial debts. Furthermore, the distinction between the game of skill and chance is necessary as the inclusion of the game of chance would lead to gambling which is a State subject, and would further lead to the filing of cases under the provisions governing online gaming and gambling of respective States. In such a scenario, the rules would lead to chaotic situations instead of providing a unified regulatory mechanism, thereby defeating its intent and purpose. As the gaming industry in India continues to thrive, with a growing number of online gaming platforms and eSports tournaments being held in the country, it remains to be seen how the legal landscape for online gaming in India will evolve in the coming years. Nevertheless, if India wants to project itself as a global leader in the gaming industry, uniform legislation to regulate online gaming is indispensable.
Akhilesh Sheshmani Dubey is an Advocate & Solicitor practising in Mumbai.