“Look before you leap” caution experts on policy for online gaming

“We are bringing in an Act to regulate gaming. The draft of the law is ready and we will soon finalise it,” Dr. Narrottam Mishra, Home Minister of the state of Madhya Pradesh recently thundered. The statement is broad, which could suggest limited understanding of the matter. Many experts associated with the sector are sceptical that a blanket regulatory framework without a clear distinction between legitimate & illegitimate businesses, will not pass the test of judicial scrutiny and that hence the Government should “look before they leap”. 

It is pertinent to note that recently, the Central Government has gone on record to say that online gaming is centrally regulated under the IT Act and online gaming is an intermediary which will be regulated by MEITY. In a written response to the Lok Sabha, Minister of State for Electronics and IT, Rajeev Chandrasekhar said “Online gaming platforms are intermediaries and they have to follow the due diligence as prescribed in the IT Act, 2000 and the Rules thereunder.”

The fact is that Online Gaming isn’t a new sector with looming, hidden threats to the populace. It has been well-understood for decades, and is here to stay. In the Union Budget 2022, the Government has, in fact, proposed to set up an Animation, Visual Effects, Gaming and Comic (AVGC) sector task force to involve stakeholders and promote employment and capacity building.

Just like television or the many OTT platforms went through their growing pains – with their potential public harms of addiction, cultural invasion and the like – online gaming also brings forth similar social concerns. A recent report by consultancy firm Ernst & Young has estimated Indian online gamers to grow from 360 million in 2020 to 510 million in 2022. Of these, an estimated 85 per cent will be mobile gamers. “For policy makers to believe that this large community of gamers are addicts, or indulging gambling, is born more out of perception and ignorance than the reality. Most gamers are using online platforms for entertainment/amusement, or for fan engagement as in the case of fantasy sports. The Government should be mindful before curtailing or impinging upon a citizen’s fundamental rights,” said Akhilesh Bhargava, a lawyer and enthusiastic online gamer.

“While little is known about the proposed policy that Madhya Pradesh is planning, it is important that the policy makers take note of the experience of states like Tamil Nadu, Kerala and Karnataka. These states enacted legislation that has not passed muster before the judiciary,” said noted lawyer Aditya Jain. “The Hon’ble Supreme Court has clarified that games of skill cannot be lumped in with games of chance (gambling or betting), and has upheld the rights of companies to conduct business.”  

The implementation of any proposed policy change should also be taken into account. “There exist many companies that offer online betting services in the guise of online gaming and have no registered office in India, and can be only accessed through VPNs. Such companies can easily evade any compliance requirements. It is akin to the structure that many online matka and satta companies have used, and who continue to thrive despite there being laws against them in the real world. There are nearly 500 million Virtual Private Network (VPN) users in India, posing a serious challenge to tracking of policy adherence,” noted Jain.  

“The Minister of IT has stated that online gaming platforms are intermediaries under the IT act, which is a welcome clarification. Law-making requires a comprehensive view much beyond populist statements, and clarity that the test of law will be passed,” summarised an industry player.  

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