MeitY Rules On Online Gaming A Shot In The Arm For The Sunrise Sector

The notification of the much awaited rules concerning the regulation and the governance of online gaming industry in India last week, promises to usher in a new era of growth for the sector. With the Centre removing legal ambiguity for the industry with this amendment to the Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021, it defines online gaming companies as intermediaries, under the Centre’s jurisdiction.

The industry has welcomed the Rules as progressive, establishing a soft touch governing framework that balances user protection with industry growth. This move aims to end the industry’s long drawn battle for legitimacy, setting the foundation for faster growth.

Let us examine how the Rules provide a huge impetus to the industry.

Central legal recognition
The Rules reinforce online gaming companies as official intermediaries and provide a path to establish the industry as a legitimate business and one of the key drivers of the AVGC vision. Further, these rules provide absolute clarity on regulatory aspects concerning governing authorities for the sector, with the Centre in the driver’s seat. This will go a long way in eliminating regulatory ambiguity between the state and the Centre reinforcing that while the Centre will regulate online gaming, the states will continue to take the calls on games which are in the nature of betting and gambling.

Give industry the foundation to grow
The Centre has been cognizant of formulating light touch regulations that give industry a strong foundation to pivot to responsible and sustainable growth. The Rules also provide for the constitution of a self-regulatory body (SRB), to be the definitive authority for allowing the operation of online gaming intermediaries (OGIs) in the country. With mandatory registration of OGIs with the SRB, the Rules establish accountability for the industry, without making regulations a vice, restricting growth.

At the same time, the Rules provide the option of provisional registration of gaming formats pending final evaluation. This ensures that go to market plans of companies are not held back due to a delay in decision from the SRB while base level hygiene measures are maintained.

Comprehensive governance and grievance redressal
While the Government will be notifying SRBs to govern the online gaming intermediaries,it has also proposed to form a grievance appellate body to oversee the SRBs. This will help address the issue of subjectivity within the SRBs and give the OGIs a fair and level playing field.

Facilitating business growth in regulated space
The mandatory SRB certification is going to eventually weed out all the illegitimate and offshore platforms giving further impetus to the OGIs to grow. It will also potentially provide clarity to State governments and hopefully give gaming companies relief from ad hoc prohibitions imposed on them by the state governments.

With a definite and uniform regulatory mechanism in place, we are looking at a paradigm shift in the governance of the industry. With the clarity provided by the Rules, it is an opportunity for the industry to consolidate its efforts towards responsible growth. The Centre has taken a bold step with the amendments to IT regulations for OGIs for a brighter tomorrow for the industry.