need to formulate a structured gaming law for online gaming

News: Due to evolving technologies, online gaming has swiftly emerged as the most engaging form of entertainment in India.

About the Online gaming industry

The online gaming including e-sports, online casual games and real money gaming. The industry has been growing at a rate of about 35% in 2019-20, outpacing OTT, television, and social media platforms.

What are the reasons behind its emergence?

It has been propelled by younger demographics, increased internet penetration, and affordable smartphones. Nowadays, we are witnessing the mobile-first phenomenon,

Legal Status

Globally

The gaming industry is a well-regulated industry, and many countries, including the UK, US, and EU, have instituted a regulatory framework.

India

The games of skill (fantasy chess, bridge, rummy, and poker) are legal and protected under the Constitution.

The games of chance (roulette, teen patti, and dice) are essentially about gambling and hence deemed illegal.

As per the Indian Constitution, gambling is classified under the State List. States have the power to regulate or prohibit such activity.

What are the challenges?

In online gaming, people are found to confuse the online real money gaming with the gambling.

The state government has failed to distinguish between online skill-based gaming and gambling. Therefore, some states like Tamil Nau Government, which have either placed restrictions or buried the sunrise sector under regulatory ambivalence. For Example, the Tamil Nadu government amended the Tamil Nadu Gaming and Police Laws, 1930 banning online games

Th “games of skill” are legitimate business activities that are protected under Article 19(1)(g) of the Indian Constitution as per the rulings of the Supreme Court and several High Courts till date. These rulings have created distinction between “games of skill” and “games of chance.”

The Way Forward

The Madras High Court struck down the Tamil Nadu law observing that a complete ban was unconstitutional. The Court acknowledged that a game involving substantial skill would not amount to gambling.

India needs to formulate a structured gaming law that ensures online gaming is played responsibly, safely, transparently and securely.

A four-member committee has been constituted to examine issues related to online gaming, identification of online games which are addictive, and whether these games really involve skills or mere tricks. Further, it is mandated to make recommendations for the promulgation of an ordinance to regulate the sector.

The committee will examine the algorithms of online games to ascertain whether they can be tweaked to the benefit of online gaming companies.

The government policies and frameworks should aim to ensure player protection and increasing stakeholders’ awareness and education.

In addition to the government’s regulations, the industry should also ensure responsible gaming and self-regulation. For example, EGF has designed and implemented code of conduct that requires operators to have features like KYC, SSL level encryption, risk-flagging mechanisms, daily and monthly restrictions, self-exclusion, and so on, to cultivate healthy gaming habits and encourages appropriate gaming behaviour.

India needs to study the global best practices that protects players, encourages responsible gaming, and assists legitimate operators while weeding out those who break the law.

The government should establish a dialogue mechanism between the government and the industry

Source: The post is based on an article “We need to formulate a structured gaming law that allows players to enjoy the thrills of online gaming responsibly, safely, transparently and securely” published in the Indian Express on 25^th June 2022.