Recently, a panel of Prime Minister Narendra Modi’s top officials called for intervention and a stricter classification of India’s online gaming sector. They proposed a regulatory framework to monitor and classify the online gaming sector in India. Let’s find out why is this regulatory framework needed and how this will affect the online gaming segment.
There was a time when games were a pass time. Today, playing online games is a full-time job. People are earning real money by playing these games.
Everything related to money has a regulator. SEBI regulates the stock market; RBI regulates banks, and IRDAI regulates the Insurance sector.
But what about the online gaming sector?
Well, to date, there is no regulatory framework for online gaming.
On 7th June 2022, a two-hour meeting was held, where the Indian skill gaming startup founders and industry associations discussed setting up a mechanism for the online gaming sector.
The recent meeting was a follow-up to the previous session, and the panel has proposed to set a regulatory framework along with classification.
How Will The Online Gaming Sector Be Classified?
Under the proposed law, the online gaming sector will be classified into two.
- Skill-based games: These games are where you use your expertise to win the game, like online chess, ludo, etc.
- Luck-based games or gambling: These games are where your chance of winning is entirely based on your luck, like sports betting, casino games, etc.
The panel has keenly considered and offered recommendations to set a new legal framework for online skill games of both types – free and pay-to-play skill-based games.
The regulatory framework will have a stricter stance on luck-based games or gambling websites. Any gambling platform that offers real money to Indian consumers should be a legal entity under Indian law.
They also proposed that gaming publishers follow a Code of Ethics, and gaming platforms must offer robust grievance redress mechanisms and conform to India’s KYC norms.
The regulatory framework will also provide the government with blocking power for unregistered online gaming platforms.
Why is This Regulatory Framework Needed?
The need to set a regulatory framework is the speed at which the sector is flourishing. Today, India has become one of the major markets for online gaming.
According to Statista, India recorded about 390 million online gamers in 2021, which will keep growing!
According to Moneycontrol, the overall gaming market in India was estimated to be worth Rs 13,600 crore in 2021. And it is expected to reach Rs 29,000 crore by 2025.
With such increasing numbers, there might be a possibility that the number of frauds might also increase. Hence, the need for an online gaming regulator is a must.
The regulatory framework will set a proper policy structure, legal framework and data privacy procedures. If these things are in place, then the online gaming sector in India could get the wings to fly and reach new heights.
The IT ministry will finalise the report after receiving further comments from panel members, and then the report will be sent to the cabinet secretariat for approval.
It’s a time-consuming process, but it will make a change for good.
That’s it for today.
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