It comes amid growing worries that video games might lead to addiction and that "inconsistent state legislation" can hurt the economy.
Digital Desk: According to a government
panel's study seen by Reuters, India should establish a regulatory organization
to categorize online games as being based on skill or chance, enact regulations
to restrict forbidden formats, and adopt stronger regulations regarding
gambling websites.
In the country's online gaming
industry, where foreign investors like Tiger Global and Sequoia Capital have
backed gaming startups Dream11 and Mobile Premier League, which are wildly
popular for fantasy cricket, top officials from Prime Minister Narendra Modi's
administration have been drafting regulations for months.
The eagerly anticipated report is
expected to influence the direction of India's mobile gaming market, which is
predicted to grow from $1.5 billion this year to $5 billion by 2025. It comes
amid growing worries that video games might lead to addiction and that
"inconsistent state legislation" can hurt the economy.
Even the definition of games has
been contested. Rummy, a card game, and a few other fantasy games are deemed
skill-based and acceptable by India's Supreme Court, while at least one state
court deemed games like poker to be more like gambling, which is illegal in
most states.
The panel of government representatives recommends the
establishment of a new regulatory agency under India's IT ministry to choose
which online games qualify as games of skill before "seek compliances and
enforcement" in its confidential draught report dated Aug. 31.
According to the 108-page
research, India needs a new federal online gaming law that will give regulatory
flexibility and grant the government "blocking powers against unlawful
gaming formats" in order to streamline the legal system.
The panel stated that several offshore betting and gambling
websites that are banned in India have grown popular among Indian users even
though it only looked at online skill games and not gambling, which is governed
by states. Both free and for-pay versions of skill games would fall under the
new regulatory framework.
"On the aspect of prohibiting games of chance (e.g. gambling
websites or apps) being played online, the proposed Digital India Act can
include it in the list of prohibited user harms that will not be
permitted," the report stated.
Although the federal government
might label chance-based games as dangerous, it would let states make the final
decision on whether to permit gambling, according to a senior government
source.
In order to make sure that no users in their area are accessing
illicit gambling or gaming, the research highlighted that state governments
already find it "difficult to install and monitor geo-fencing
measures."
The IT ministry will finalize the report after receiving further
comments from panel members, who are some of Modi's top bureaucrats, including
the Heads of the Revenue and Sports ministries. It will then be sent to the
cabinet secretariat for approval, though there is no timeline for finalization.
