Ministers of Revenue and Sports report directly to Prime Minister Narendra Modi on the panel.
The group suggests establishing a regulating authority to categorize internet games according to their degree of skill or chance.
The suggestion to establish a regulating authority to determine whether or not online games are based on skill or chance has the potential to settle the industry’s never-ending discussion on the subject.
The proposed study also advocated for stronger regulation of online gambling sites and the blocking illegal file types.
Members of the panel have been hard at work for months on the draught of laws for the online gaming business, where major foreign investors like Tiger Global and Sequoia Capital have supported gaming firms like Dream11 and Mobile Premier League, famous for fantasy cricket.
This long-awaited study will have significant implications for the mobile gaming sector in the nation.
Online gambling and gaming applications have recently been under intense investigation, coinciding with this draught report’s release. Tamil Nadu and Kerala are among the states considering outright bans on the card and other games of chance.
Jurisdiction governments already find it “difficult to establish and monitor geo-fencing measures” to prevent residents from their state from accessing illicit gambling and gaming sites, according to the paper.
Currently, the market is worth around $1.5 billion. Still, by 2025, analysts anticipate that number will have increased to $5 billion—concerns about games’ potential addictive qualities and “inconsistent state legislation” disturbing the industry.
Some Of The Proposal Highlights In The Draft Report:
According to the research, a “long-term approach” for the federal government to control internet gambling would be to pass new legislation specifically on the subject. The new legislation will take some time to be drafted and passed into law. You may use rules created under India’s current IT legislation to govern the sector till then.
- The research suggests that the Union IT Ministry should oversee all forms of online gaming, except e-sports and gambling sites.
- It is proposed in the report that regulations be put in place for both for-profit and non-profit skill-based games and other similar casual activities that may have significant consequences.
- The new regulations would apply to domestic Indian gaming operations and those based outside that serve Indian customers.
- The research suggests setting up a governing organization to accredit different types of internet gaming and to keep tabs on what constitutes a game of skill.
- Due diligence of internet gaming sites, including a robust grievance redressal process and strict know-your-customer requirements, is also strongly recommended in the research.
- According to the research, any internet gaming site that allows Indian customers to wager real money on games should be established as a legal organization in India. They have also suggested that the government be able to prohibit access to unlicensed internet gambling sites.
- The research suggests a three-tiered framework for resolving disputes, including the gaming platform, self-regulatory organizations of gaming sites, and an oversight committee headed by a relevant Ministry.
After obtaining further feedback from the panel, the IT Ministry will complete the report.
The report will be then forwarded to the cabinet secretary for final approval, but a deadline has yet to be set.
Fantasy sports on Dream11, for example, continue to be quite well-liked amongst online gamers. An individual user may establish a team for as low as $0.17, and the winning teams will split $88,000. A high performer might earn as much as USD 3,462.
India has over 400 internet gaming firms, and the industry has received a massive investment totaling USD 1.7 billion over the last 17 months.
The country’s job market is booming, fostering a proliferation of new positions in IT and game creation.
Despite this, the betting industry is stressing the need for centralized government regulation of the online gambling business.
Although both subscription-based and entry-fee-based, you cannot compare online games of skill with gambling.
Since ‘games of skill’ do not come within the jurisdiction of ‘gambling,’ the Indian courts have held that Article 19(1)(g) of the Indian Constitution protects legitimate commercial operations, including ‘games of skill.
These cases have made it clear that only games of chance, not games of skill, qualify as gambling.
To better grasp the distinction between online skill gaming and online betting and gambling, a group of cabinet members met with industry organizations and key operators in August to debate the valuation strategy for GST on online gaming.
Given the industry’s meteoric rise, clear rules and guidelines are crucial to propel it to the next stage of success.
The government has to take proactive measures to regulate the industry adequately.
Given its projected expansion, the sector should be free of antiquated norms and regulations.