Govt bans betting in online gaming, to let self-regulatory bodies vet real-money games

NEW DELHI: Prohibiting any type of wagering or betting in online gaming, the government on Thursday moved ahead to notify the much-awaited regulatory norms for the functioning of the booming industry, while opting for a self-regulatory model for games involving real money.
Minister of state for IT & electronics Rajeev Chandrasekhar said that the government had come with the rules for online gaming companies after detailed consultations with the industry as well as other stakeholders, and these should now help in promoting the growth of the sector while ending ambiguity around the policy environment.
“Permissible online games are those, real money or otherwise, that do not involve wagering, user harm in its content, and do not create any addictive consequences for children,” he said.
According to industry experts, the big winner after the announcement of the rules is the fantasy gaming sector, led by Dream11 which has been left out of definitions of wagering and out of regulation.
They said there will be an ambiguous period for the industry now that the rules have been announced. “As per this ruling, for six months until the self-regulating body to certify the games is put in place, will the companies in this segment be allowed to promote? This is an ambiguous period.”
Industry players said after the announcement of the regulatory norms by the IT ministry, the next important area that needs to be considered will be the GST ruling that will decide what GST rate has to be applied on the industry, and whether it will be applied on gross value of fantasy wagers or on net value of fantasy wagers. That is expected to come around June this year.
The ministry will now have power to designate as many online gaming self-regulatory bodies as it may consider necessary for the purposes of verifying and allowing an online real-money game. The self-regulatory bodies will have members from the gaming industry; educationists; experts in the field of psychology or mental health; individuals having special knowledge of or practical experience in the field of information and communications technology; or people who are associated with organisations dealing with the protection of child rights.
The self-regulatory body will have to decide on the application of a gaming company within three months. The government said the online gaming intermediary that enables access to such real money games have to display a “demonstrable and visible mark of such verification”, stating that the game is verified by the self-regulatory body.