The Ministry of Electronics and Information Technology’s (MeitY) draft rules to regulate the burgeoning online gaming sector, laying the foundations of a framework designed for more accountability and transparency towards them. The gaming industry and its users have been waiting for greater regulatory clarity with bated breath. At the outset, the draft rules appear to strike a balance between user and industry interests, which is a herculean task in itself.
The draft rules aim to establish Self-Regulatory Organisations (SROs) that will register gaming services or intermediaries as well as the games they provide to users. These services will have to display registration marks for each game registered with the SRO to earn users’ trust. Additionally, an online gaming service must publish “a random number generation” certificate from a reputed certifying body for each online game”. Doing so will boost player confidence by ensuring that the games do not favour specific users or the platform itself.
Grievance redressal mechanism
The draft rules call for a grievance redressal system to be set up, where complainants can lodge their objections. They state that each complaint must be tracked with a unique ticket number, be acknowledged within 24 hours and resolved within 15 days. If the outcome doesn’t cut ice with the user, she can escalate the matter first to an SRO and later to a Grievance Appellate Committee which is also a new oversight mechanism proposed by the MeitY.
The rules also require the appointment of a grievance officer, a chief compliance officer and a nodal officer who can liaise with law enforcement agencies and must be residents of India, akin to existing obligations for social media companies. The MeitY’s mandates cement the accountability of gaming services, and should reassure players confident that their security and privacy will be paramount. They will also act as a warning sign to unscrupulous offshore business, who, are unlikely to comply with the local resident requirements.
Off-shore online betting and gambling services have always been a thorn in India’s digital ecosystem. We have all seen the advertisements that lure unsuspecting users to such patently illegal services, while searching the internet, streaming cricket matches, and even while driving on the road. An overall lack of hygiene in the digital ecosystem threatens user safety, which is why the new rules require all legitimate gaming services to maintain an office in India, as well as appoint resident officers. The country’s vociferously debated data protection norms explicitly state that sensitive user data, including financial data, must be stored in India – an aspect that the draft amendments are in sync with.
The draft rules have also addressed concerns about user addiction, not by being prescriptive but by defining the contours of self-regulation. The rules outline measures to counter addiction and financial loss, which include warning messages that flash when users exceed a reasonable duration for a gaming session. They also allow users to lock themselves out from the game if they exceed a self-defined time limit or after they’ve spent a certain amount of money.
As it stands, online gaming is subject to “know-your-customer” (KYC) norms as prescribed by the Reserve Bank of India. According to the draft rules, whenever a gaming platform on-boards a new player, they must abide by the prescribed KYC norms to verify users. This is a welcome move which will ensure that both players and services are held accountable if a user’s identity is misrepresented. These norms are presumably being applied due to the involvement of money. However, a large population of online gamers do not play with money; they only play the free versions of games. It gives consumers the option to sample games discover innovations. Applying KYC norms at the on-boarding stage itself – even where monetary consideration is irrelevant – may act as a deterrent for users. Moreover, this requirement does not factor in free-to-play online games.
The draft rules also require services to make clear in their user agreements that “all the online games offered by the online gaming intermediary, along with the policy related to withdrawal or refund of the deposit made with the expectation of earning winnings, the manner of determination and distribution of such winnings, and the fees and other charges payable by the user for each such online game.” Additionally, services should inform users about the measures taken to protect their deposits and the framework of the SRO that it is a member of.
Overall, the measures outlined in the draft rules which will govern online gaming aim to make a measurable impact on user safety, while holding servies accountable for the trust players put in them. The rules are intended to be a light-touch regulatory mechanism that doesn’t hinder the sector’s growth, and could act as a springboard for a comprehensive legislation in future. More importantly, they will be emblematic of the government’s commitment to create a competitive yet secure digital India.
This article has been authored by Sanjay Goel, who is a retired bureaucrat and digital technology expert. The views expressed here are strictly personal.