Meity's new rules aim to curb growing menace of online ads of illegal betting games

The Ministry of Electronics and IT (MeitY) has introduced new rules for online gaming that involves disallowing intermediaries to host or display any advertisement or surrogate advertisement or promotion of an online game that is not permissible.

This is aimed at curbing the growing menace of online ads of illegal betting and gambling operations targeting Indian users, as per MeitY.

The ministry stated that betting and gambling activities are banned under various State laws, while few games of skill have been held to be constitutionally valid by the Supreme Court in various judgements. 

Despite this existing legal landscape, various social and economic concerns have emerged from this industry over the past few years, as per the ministry, including: 1) User harms in the nature of addiction-related concerns among children and adults, especially in terms of financial losses incurred by adult users due to such addiction. 

2) Content-related concerns in terms of depiction of violent or inappropriate content, with absence of concrete measures to prevent children from accessing such content or real money games. 

3) Ads of offshore gambling and betting websites targeting Indian users. 

4) Lack of safeguards to secure users’ money and money laundering-related concerns in the absence of any strict KYC mechanism.

To address such concerns effectively through legal means, MeitY has introduced various checks and balances through amendments to the Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021, notified on April 6, 2023. 

The purpose of these amendments is to control the unabated and unwarranted negative impact of online gaming activities on users, especially children and other vulnerable sections of society.

The rules will ensure that online games or sites that involve wagering will be banned completely including advertising or any time of presence. For this, the rules introduce the concept of ‘permissible online game’. 

These rules will ultimately allow only such online real money games in India that are verified by self-regulatory bodies (SRBs) as- (a) not involving wagering on any outcome; (b) being compliant with the obligations under these rules; (c) the age under law at which an individual is competent to enter into a contract, and (d) the framework made by the SRB.

Additionally, in case of any other non-real money online game that has the potential to cause user harm or affect the security of India, the government has the power to require such online games to be subject to the obligations under the rules as are applicable to online real money games. Thus, this empowers the government to control any non-real money online game that could have a harmful impact on the Digital Nagriks.

The rules cast an obligation on intermediaries, including social media platforms and app stores, to make reasonable efforts to not host, publish or share any online game that causes user harm or which has not been verified as a permissible online game by an online gaming SRB designated by the government. 

Rules address addiction-related concerns among children & adults 

To be verified as a permissible online real money game, an SRB will ensure that any online game is tested against the framework published by it. 

This framework will mandatorily include measures to ensure that such online real money game is not against the interests of sovereignty and integrity of India, security of the State. Additionally, safeguards against user harm, measures to safeguard children through parental controls and age-rating mechanisms, measures to safeguard users against the risk of gaming addiction, financial loss and fraud will also be present.

Users can identify permissible online games through a demonstrable and visible mark of verification to be displayed mandatorily for all online games verified by SRBs.

The rules require SRBs to publish the following information on their website/mobile app -  Updated list of all permissible online real money games verified by it, with the applicant details, dates and period of validity of verification, reasons of verification and the details of the suspension or revocation of verification.

Also, updated list of present and former SRB members, date of acceptance as member, their corporate or business-related identity number, and the details of suspension or revocation of membership.

Online gaming intermediaries enabling access to online real money games will have to comply with requirements such as: Disclosing relevant information to users through terms of service and privacy policy - All the online games offered, with the policy for withdrawal or refund of the deposit made, how the winnings will be decided and distributed, and any other payable charges. The KYC procedure followed before accepting any user deposit in cash or kind, among others. 

The rules also enable an aggrieved user to appeal before the Grievance Appellate Committee (GAC) against the decision of the Grievance Officer of the online gaming intermediary concerned, in case the above specified disclosures under the rules are not conveyed to the users by such online gaming intermediary.

The various requirements to be followed by SRBs as per the rules will ensure that SRBs function at arm’s length from their members. This is done through various provisions - Approval of any entity to be designated as an SRB will be done by the Ministry as per the criteria given in the rules.

Board of Directors of the SRB need to consist of members free from conflict of interest and representing all relevant stakeholders and experts. This will ensure that the diverse interests of all stakeholders are taken into account in the functioning of the SRB.

In case of failure of SRB to comply with any rule, the Ministry will have the power to suspend or revoke the designation of such SRB.

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