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Protecting the Digital Playground: An Attempt to Regulate Online Gaming in India




INTRODUCTION


Online gaming has been a trending topic in the recent past. Several platforms have come up with innovative gaming ideas to increase public participation. Numerous young minds indulged in online gaming especially during lockdown when the participation tremendously increased. To manage and regulate this emerging area of online gaming, there felt a need for a proper legal framework.


Recently the Ministry of Electronics and IT (“the Ministry”) has amended the Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021 (“Amended Rules”) through a notification dated 6th April 2023 to protect online gamers from harmful content and addiction. The amendment is called the Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Amendment Rules, 2023. These rules can be considered as a stepping stone towards protecting the budding online gaming industry in India. The industry is required to be regulated because a lot of these games involve the element of real money, thereby increasing the possibility of abuse and fraud against gamers. The process was initiated in January 2023 when the Ministry came up with a “draft amendment” to the Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021, and invited comments and suggestions from various stakeholders and other public in general. Finally, after numerous rounds of consultation based on the suggestions received, the rules were amended and published on 6th April 2023.


ANALYSIS OF AMENDMENT RULES


The term “online game” is defined in Rule 2 (1) (qa) of the Amended Rules. The definition goes on to include not just “online real money games” [defined in Rule 2 (1) (qd)] but all kinds of games offered on the internet and accessible through a computer.


Self-regulatory bodies (SRBs): Defined in Rule 2(1) (qc), online gaming SRBs include only the entities designated under Rule 4A. Further:


A. As per Rule 4A, the Ministry via a notification will designate a few entities as SRBs and only the games approved by these designated SRBs will be considered as “permissible online real money games” [defined in Rule 2 (1) (qf)]. Further, the rule explicitly lays down the criteria to be considered by the SRBs while deciding whether to approve an online real money game or not.


B. The Amended Rules also require the designated SRBs to publish a list of online games which have been approved/verified by it, along with their period of validity, criterion of verification, and other details about the suspension and revocation. The Ministry has the power to ask the SRBs to produce before them any information required at any time. Further, some provisions provide for a composition of the board for each SRB.


C. Rule 4B of the Amended Rules allows online gaming SRBs to present an application before the Ministry for registration. The rule also provides for the criterion to be satisfied by the SRBs to be eligible to be registered.


Online Gaming Intermediaries ("OGIs"): These are the entities that allow users to access any kind of online game through their computers. [defined in Rule 2(1) (qb)]. Further:


A. Due Diligence Obligations for OGIs are provided along with the obligations applicable to significant social media intermediaries under Rules 3, 4, and 5 of the Amended Rules, with specific obligations of Real Money OGIs set out as additional points.


B. It is pertinent to note that with this Amendment, OGIs are also included under Rule 4(5) which says that the OGI shall have a physical contact address in India.


Reading Rule 4A (8) along with Rule 3 (1)(b) of the Amended Rules further requires the SRBs to provide a proper framework to prevent “harm”. The OGIs are then required to make sure that any online game (whether or not online real money game) that can cause “user harm” is not published. The term “harm” has been explained as “any effect which is detrimental to a user”.


ISSUES


One of the major debates that arise with respect to online gaming is, whether a game is a “game of skill” or a “game of chance”. The Indian courts have faced this question in several instances. In the case of State of Andhra Pradesh v. K. Satyanarayana, the Supreme Court observed that to decide this question one needs to check whether the “dominant factor” in the game is derived from skill or by chance. Further, it requires checking whether the platform offering such a game is making any monetary benefit from this gaming activity.


In a similar pattern in the year 2017, the Punjab and Haryana High Court in the case of Varun Gumber v. Union Territory of Chandigarh and Others gave the following observation:


“i) the competitions where success depends upon the substantial degree of skill are not gambling; and ii) despite there being an element of chance, if a game is preponderantly a game of skill it would nevertheless be a game of ‘mere skill’.”


Since betting and gambling is a subject under the state list (list II Schedule VII of the Constitution of India), there are several state legislations regulating this business. The courts have been tackling the situation based on these legislations, but the recent Amended Rules put the responsibility on the SRBs to satisfy themselves during the verification process of a real money game that such a game “does not involve wagering of any outcome” [Rule 4A (3)(a)]. The catch here remains unanswered since the rules do not provide any guideline/criterion based on which it can be decided whether an online game is a game of chance or a game of skill.


Another issue that may arise is with respect to the term “harm”. Since the term is not clearly defined in the Amended Rules, this will give rise to confusion amongst the SRBs while approving any online game.

The interpretation and implementation of the rules are now in the hands of SRBs, if they come up with a proper criterion-based framework for classifying and verifying games, after being designated by the Ministry through official notification, the process of verification would be more transparent. If the SRBs fail in this, then their interpretation may vary from a case-to-case basis which may give room for bias and prejudice.


CONCLUSION


The amendment tries to channel the ongoing trend of online gaming in India. It is an attempt by the central government to protect the flourishing online gaming industry and to avoid any fraudulent or scrupulous practices by online gaming platforms toward its users. These rules cover all sorts of online games under its umbrella whether it involves real money or not. Further, the amendment rules 2023 try to organize the verification process of the online game by necessitating the formation of SRBs and identifying their roles. It cannot be denied that some things are still uncertain but prima facie it looks like a wholesome attempt to considerably regulate the online gaming industry towards betterment. Though its efficacy depends on how well will it be implemented and adapted by these online gaming platforms over a period of time, it surely will help develop a sense of security amongst its users. If the SRBs and OGIs perform their duties in a properly organized and responsible manner then the Amended Rules can turn out to be quite effective and efficient in regulating the online gaming industry in India.

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