Centre May Direct Fintech Cos To Block Payment Gateway Access To Non-Permissible Online Games

While the Ministry of Electronics and Information Technology (MeitY) has been tightening its grip over online gaming, the ministry may release a separate order to fintech and payment companies for blocking the access of their payment gateways to non-permissible online games.

“The ministry is planning to issue a notification or an order that a non-permissible game should not be given the ability to gateway through a financial payment gateway. If you are not permissible on the Indian internet, it is not just for the users to not access it but also for gateway into any other application into India,” a senior official said as quoted by ET in a report.

With this move, the government is looking at cracking down on operations of illegal online betting and gambling companies, with more focus on such companies based in foreign locations.

The process is expected to start once the self-regulatory organisations (SROs) begin operating.

Earlier this month, MeitY notified the rules for online gaming.The rules define an online game as a game that is offered on the internet and is accessible by a user through a computer resource or an intermediary.

Under the new institutional framework, all online games would be determined as permissible or not by a SRO and there will be multiple SROs.

“These rules don’t deal with all the nuances and the sophistication of games of chance games or skill. We bypass that and basically lay out a basic principle that the moment an online gaming passes into involving betting and wagering, regardless of the core content of the game, then it falls afoul of these rules,” Minister of State for Electronics and Information Technology Rajeev Chandrasekhar said at the time of announcing the rules.

Interestingly, banks and fintech startups have already started blocking access of payment gateways to players in online gaming and cryptocurrencies, the segments which fall under regulatory grey areas.

Recently, the Ministry of Information and Broadcasting (MIB) had advised media entities, platforms and online advertisement intermediaries to refrain from carrying advertisements/promotional content of betting platforms. The advisory was issued to all media formats, including newspapers, television channels, and online news publishers.

The government has cracked down on these as many users, lured by the promise of high returns, have had to face financial crisis because of it, even leading to suicides in some cases.

In February, the Indian government banned 138 chinese betting apps as the apps in question were flouting Section 69 of the IT Act. The Centre also directed Google to stop overseas online betting platforms from marketing their ads in the country late last year.

Meanwhile, the Enforcement Directorate (ED) also seized INR 212.91 Cr till December 2022 in connection with money laundering probes involving online gambling platforms.

Note: We at Inc42 take our ethics very seriously. More information about it can be found here.