Game On: IT Ministry To Oversee Online Gaming, Esports Gets Official Recognition

Amid the ongoing discussions on online gaming regulations in the country, the Centre has appointed the Ministry of Electronics and Information Technology (MeitY) as the nodal ministry to oversee the online gaming industry.

The central government notified the change to the Allocation of Business Rules on December 26. As part of the amendments, the Ministry of Youth Affairs and Sports (MYAS) has also been appointed as the nodal ministry for esports in multi-sports events.

With this move, the government has integrated esports with mainline sports in the country, giving the segment an official recognition. This comes at a time when esports has already been recognised as a pilot medal sport in Asian Games. Earlier this year, India also won the bronze medal at the 2022 Commonwealth Esports Championships.

The growing popularity of esports has led to more players taking it up as a career option. As a result, the demand to recognise esports had also been growing. Moreover, due to the lack of clarity on regulations, the Rajasthan government released the draft Rajasthan Virtual Online Sports (Regulation) Bill, 2022 which brought esports under its ambit, along with fantasy gaming.

The move of appointing MeitY comes at a time when the online gaming industry has been calling for uniform centralised regulations. The regulatory instability has been plaguing the industry for the last two years as a number of states such as Telangana, Andhra Pradesh, Tamil Nadu, Karnataka, and Kerala have issued various notifications banning online gaming.

“We welcome the appointment of MeitY as a nodal ministry for online gaming. A uniform central regulation for online skill gaming has been a long-standing demand of the industry and this step will hopefully lead to a progressive regulatory framework underpinned by consumer welfare,” Roland Landers, CEO of the All India Gaming Federation, said.

Landers added that the appointment of MYAS to regulate esports will finally lead to the recognition of the India Esports Federation and better rules and procedures for the selection of Indian teams for international events like the Asian Games. It will also lead to better opportunities and facilities for esports players, on par with other sportspersons, he said.

On Monday, the Animation, Visual Effects, Gaming and Comics (AVGC) Promotion Task Force, which was constituted earlier this year, submitted its report to the Ministry of Information and Broadcasting (MIB). In the report, it proposed the formation of a national AVGC Mission with a dedicated budget outlay to promote the sector.

Recently, Union Minister Ashwini Vaishnaw said that the Centre has decided to come up with a new law for online gaming. The minister held a meeting with the IT ministers of all the states on the issue. The state ministers raised concerns over the effects of online gaming on the youth in the country.

It is important to note that the government set up a seven-member inter-ministerial task force in May 2022, chaired by MoS for IT Rajeev Chandrasekhar to work on online gaming regulations.

Meanwhile, Shivani Jha, director of Esports Players Welfare Association, also welcomed the government’s latest move. “The identification of nodal ministries and centralisation of power for online gaming and esports is a great first step towards bringing consistency of legislation and rules in this sector. Hopefully it will ensure that gamers will enjoy the same rights across states now and will not face arbitrary bans and criminalisation,” Jha said.

Amid regulatory instability and the ongoing funding winter, Indian gaming startups saw a massive decline in funding in 2022. Together, they raised $349 Mn during the year, a decline of 80% from $1.74 Bn in 2021. The average deal size stood at $3.4 Mn, a 38% decrease compared to 2021. Industry experts predict a higher number of funding deals in 2023 after better clarity on regulation.

A number of startups have sprung up in the online gaming space in the country over the last few years, including unicorns like Dream11, MPL, and Games24X7.

The number of gamers in the country rose 12% to 507 Mn by March 2022 (24% were paying users) from 450 Mn in March 2021, according to a report by gaming and interactive media-focused VC fund Lumikai. Additionally, the sector is estimated to be worth $3.9 Bn by 2025 in the country, as per a KPMG report.

On the other hand, the current size of the Indian esports industry is INR 250 Cr and is predicted to clock 46% compound annual growth rate (CAGR) in the next four years to reach INR 1,100 Cr by 2025, as per an EY report.