Online gaming industry in India
26-08-2023
12:04 PM
1 min read
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Overview:
A task force set up the Ministry of Electronics and Information Technology has prepared a final report of its recommendations to regulate the online gaming industry in India.
About:
- The task force has proposed the creation of a central regulatory body for the sector, clearly defining what games of skill and chance are, and bringing online gaming under the purview of the Prevention of Money Laundering Act, 2002.
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Recommendations of the task force
- A central-level law for online gaming should apply to real money and free games of skill, including e-sports, online fantasy sports contests, and card games etc.
- Casual games with no real money element in the form of stakes may be kept outside the scope of such rules, unless they have a high number of users in India.
- Creating a regulatory body, which will determine what qualifies as a game of skill or chance, and accordingly certify different gaming formats, seek compliance etc.
- A three-tier dispute resolution mechanism, similar to that prescribed under the Information Technology Rules, 2021 for online streaming services.
- Any online gaming platform – domestic or foreign– offering real money online games to Indian users will need to be a legal entity incorporated under Indian law.
Why a central-level law?
- Online gaming so far has been a state subject, but state governments find it extremely difficult to enforce certain rules like geo-blocking certain apps or websites within the territory of their state.
- Also, rules passed in one state are not applicable in another, which has caused inconsistency.
- State governments also do not have enough blocking powers like the Centre to issue blocking orders for offshore betting sites.
Online gaming market in India
- 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 in the country grew at a CAGR of 38% between 2017-2020, as opposed to 8% in China and 10% in the US.
- India’s percentage of new paying users (NPUs) in gaming has been the fastest growing in the world for two consecutive years, at 40% in 2020 and 50% in 2021.
Source : PIB