Online Gaming: What do MeitY?s draft rules say?

Online Gaming: What do MeitY’s draft rules say?

News: A self-regulatory body, grievance redressal mechanism and mandatory know-your-customer norms for verification are among the key proposals in the draft rules for online gaming, released by the Ministry of Electronics and IT (MeitY) on Monday. 

What do the Draft rules say?
• Online games will have to register with a self-regulatory body, and only games that are cleared by the body will be allowed to legally operate in India. 
• The proposed rules, aimed at safeguarding users against potential harm from skill-based games, have been introduced as an amendment to the Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021. 
• As per the principles laid under the rule, wagering on the outcome of a game will not be allowed. 
• Similar to social media and e-commerce companies, online gaming platforms will also have to appoint a compliance officer who will ensure that the platform is following norms, a nodal officer who will act as a liaison official with the government and assist law enforcement agencies, and a grievance officer who will resolve user complaints.
• Online gaming firms will be required to undertake additional due diligence, including KYC of users, transparent withdrawal and refund of money, and a fair distribution of winnings. For KYC, they will have to follow norms laid down for entities regulated by the Reserve Bank of India (RBI).
• Gaming companies will also have to secure a Random Number Generation Certificate, which is typically used by platforms that offer card games to ensure that game outputs are statistically random and unpredictable. They will also have to get a “no bot certificate” from a reputed certifying body.

What will be the structure of self-regulatory body?
• The self-regulatory body will have a board of directors with five members from diverse fields including online gaming, public policy, IT, psychology and medicine.
• It must ensure that the registered games don’t have anything “which is not in the interest of sovereignty and integrity of India, defence of India, security of the state, friendly relations with foreign states or public order, or incites the commission of any cognizable offence relating to the aforesaid. 
• There could be more than one self-regulatory body and all of them will have to inform the Centre about the online games they have registered, along with a report detailing the criteria for registering a certain game. 

What was the need to regulate the sector?
• There was need to keep gaming ecosystem safe as around 40 to 45 per cent of the gamers in India are women. 
• To encourage growth and innovation in the online gaming sector.
• Online gaming is described as “a very important piece of the start-up ecosystem and a part of the goal of the 1-trillion-dollar economy.”
• The revenue of the Indian mobile gaming industry is expected to exceed $1.5 billion in 2022 and is estimated to reach $5 billion in 2025. 
• The industry grew at a CAGR (compound annual growth rate) of 38 per cent in India between 2017-2020, as opposed to 8 per cent in China and 10 per cent in the US.