Government Likely To Form Group Of Ministers To Oversee Online Gaming Regulation

The Indian government is considering the establishment of a Group of Ministers (GoM) to develop and oversee a comprehensive regulatory framework for the online gaming industry. This move also aims to address various issues impacting the sector.

The proposed GoMs is expected to comprise prominent members of the government, including home minister Amit Shah, finance minister Nirmala Sitharaman, IT minister Ashwini Vaishnaw, and information and broadcasting minister Anurag Thakur, ET reported.

A senior government official said that efforts are currently underway to establish a self-regulatory organisation (SRO). “We are talking to the industry but the overall consensus is to form a GoM to look into all the aspects of the online gaming sector,” he added.

As the nodal ministry for online gaming, the Ministry of Electronics and Information Technology (MeitY) will continue to have the principal oversight role. The proposed GoM is expected to collaborate with high-ranking officials from multiple key government departments, including but not limited to the Department of Revenue, Income Tax, and the Department for Promotion of Industry and Internal Trade (DPIIT).

Various stakeholders in the online gaming industry, including organisations like the All India Gaming Federation (AIGF), Esports Players Welfare Association (EPWA), All India Gaming Regulator (AIGR) Foundation, and a consortium of the E-Gaming Federation (EGF) and the Federation of Indian Fantasy Sports (FIFS), have submitted draft proposals for the establishment of a Self-Regulatory Organization (SRO).

While the SRO is yet to be officially formed, these industry players have put forward recommendations aimed at responsible and well-regulated online gaming. The suggestions from the industry include implementing automatic blocking of gaming accounts upon reaching certain thresholds, measures to prevent violations of the Foreign Exchange Management Act (FEMA), and stringent reporting requirements for users, including maintaining a comprehensive database of players and monitoring illegal betting sites.

The industry is also committed to involving civil society in the yet-to-be-formed SRO to address the possible negative impact of online gaming, especially on school-aged children.

The online gaming industry in India is currently facing a multitude of challenges. In addition to ongoing concerns related to the Goods and Services Tax (GST) in the real money gaming sector, online gaming companies have reportedly received show-cause notices for suspected tax evasion amounting to a significant sum of INR 1 Lakh Cr.

In its effort to enforce tax compliance, the government introduced amendments to the GST law, which now requires overseas online gaming companies to mandatorily register in India beginning from October 1.

In light of the evolving tax and regulatory environment, several online gaming platforms have taken the step to temporarily suspend their operations. Platforms such as Quizzy, OWN, and Fantok have opted to halt their operations in response to these changing dynamics.

Additionally, Bengaluru-based Gameskraft made a similar strategic decision by shelving its fantasy gaming offering, Gamezy Fantasy, in September.

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