SUMMARY
A government panel has recommended creating a regulatory body to classify online games as based on skill or chance
The panel has reportedly also called for introduction of rules to block prohibited formats and take a stricter stance on gambling websites
It also highlighted the need for India to have a federal online gaming law in its report
The endless debate on the online gaming industry in the country may finally come to an end as a government panel has reportedly recommended creating a regulatory body to classify online games as based on skill or chance.
The panel has also called for introduction of rules to block prohibited formats and take a stricter stance on gambling websites in its report, news agency Reuters reported.
The panel of Prime Minister Narendra Modi’s top officials has been working on drafting regulations for months now, it said.
In the draft report dated August 31, the panel has called for creation of the new regulatory body under the aegis of the IT Ministry. The body will determine which online games qualify as games of skill, and “seek compliances and enforcement”, the agency reported.
The report has also highlighted the need for India to have a federal online gaming law which will provide regulatory flexibility with punishment provisions, along with blocking powers, for the government against prohibited gaming formats, it added.
In the case of online games of chance, the proposed Digital India Act can include it in the list of prohibited user harms that will not be permitted, the report said.
The report will be sent to the Cabinet for approval after the IT Ministry finalises it based on further comments from panel members. However, no timeline for the finalisation of the report has been set.
Earlier this year, the government set up an inter-ministerial committee to come out with a framework for the gaming industry in the country, work on regulations, and identify a nodal ministry to look after the sector.
Under the List-II of the Seventh Schedule of the Constitution of India, states have the power to legislate ‘sports’ and ‘betting and gambling’. Several states such as Telangana, Andhra Pradesh, Tamil Nadu, Karnataka, Kerala have issued several notifications to ban online gaming over the last few years, creating confusion for gaming startups in the country. Many of these notifications were later struck down by the respective High Courts of these states.
A unified law is expected to bring more clarity into the sector. Many gaming executives earlier told Inc42 that a centralised guideline for the industry is the need of the hour.
Dream11 became the first startup from the online gaming sector to turn unicorn in 2019. MPL and Games 24×7 from the industry also joined the coveted club in 2021 and 2022, respectively.
On the other hand, gaming company Nazara Technologies made its debut on the stock exchanges last year.
According to a FICCI-EY report, the number of online gamers in the country reached 390 Mn in 2021 and the sector generated a revenue of nearly $1.3 Bn during the year.
