Government Moots Self-Regulatory Mechanism, Mandatory Verification for Online Gaming Firms

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The government has proposed a self-regulatory mechanism, mandatory verification of players and physical Indian address for online gaming companies, according to the draft online gaming rules published on Monday. Online gaming companies will be covered under the new IT rules that were issued in 2021 for social media platforms.

The online gaming platforms are expected to comply with the laws of the land, including any such law that relates to gambling or betting or the age at which an individual is competent to enter into a contract.

“The draft amendments are aimed at addressing the said need while enabling the growth of the online gaming industry in a responsible manner,” the notice said.

The draft amendments envisage that an online gaming intermediary will observe the due diligence required under the rules, “including reasonable efforts to cause its users not to host, display, upload, publish, transmit or share an online game not in conformity with Indian law, including any law on gambling or betting”.

Online gaming companies will not be allowed to engage in betting on the outcome of games under the principle laid in draft rules, the minister said. As of now, all permissible online gaming will need to be registered with a self-regulatory organisation that will be accountable to the online gaming rules, he added.

“As per the principles laid under the rule, wagering on the outcome of game will not be allowed. All online gaming companies will have to register with the self-regulatory body that will decide on the action required to be taken as per the rules,” the minister stated.

The draft rules prescribe additional due diligence for companies by displaying a registration mark on all online games registered by a self-regulatory body and informing its users regarding its policy related to withdrawal or refund of the deposit, manner of determination and distribution of winnings, fees and other charges payable and KYC procedure for user account registration.

“Self-regulatory bodies will be registered with the ministry (Ministry of Electronics and Information Technology) and may register online games of such online gaming intermediaries who are its members and which meet certain criteria. Such bodies will also resolve complaints through a grievance redressal mechanism,” the notice said.

The Ministry of Electronics and IT has invited public comments on the draft rule by January 17.