To regulate online gaming states start framing legislation

States have begun to frame their own legislations to curb online real money gaming to fill the vacuum created in the absence of a self-regulatory body and mechanism to tackle online gaming which was mooted by the Union Ministry of Electronics and Information Technology (MeitY) in April 2023. The states that have started this exercise include Tamil Nadu and Karnataka.

Incidentally, in April TRAI (Telecom Regulatory Authority of India) kicked off consultations to formulate the National Broadcasting Policy 2024. To pave the way for the same, the MeitY notified amended IT rules in April 2023. The objective is to regulate the ballooning online gaming industry and set up three self-regulatory organisations (SROs) but it shot down three proposals that were submitted in the next few months.

“The SROS were supposed to decide which games are permissible and which are not. The IT ministry’s goal also was for these SROs to become a guiding beacon for various state governments so they didn’t ban permissible games. But now there’s a vacuum and states are moving on their own,” a senior industry executive told the newspaper.

In November last year, after the SRO plan was trashed, the Centre set up a group of ministers to look into regulatory issues around online gaming. Home minister Amit Shah and finance minister Nirmala Sitharaman were also on this committee.

In 2022, the Tamil Nadu government introduced legislation to regulate online gaming and gambling. Under the aegis of this law, the state also set up a regulatory authority. This piece of legislation intended to ban online real money games. However, in November 2023, the Madras High Court ruled that the prohibitions under it could not apply to games such as rummy and poker prompting the state government to work on a revised law to curb these online games.

Earlier in May 2024, the Tamil Nadu Online Gaming Authority issued stringent warnings against those advertising online gaming platforms in the state. Similarly, the Karnataka government is working on legislation to curb betting and online real money games. State home minister G Parameshwara said in February that while Karnataka would work on such a regulation, an umbrella Central policy was required for the prohibition of online games to be effective.

“Initially, the signal from MeitY was that once SROs start approving games as permissible, companies could use that to create awareness among state governments taking an opposing stance… that the game has been cleared by a self-regulatory mechanism notified by the Centre. But the system was never operationalised,” another gaming company executive told the newspaper on condition of anonymity.

A senior IT ministry official said the proposal to set up SROs were turned down since they included a high degree of representation from the industry and the government was not comfortable with such a high degree of industry representation, that implied a high degree of influence.

The consultation paper that TRAI put out in the public domain read, “Several concerns have also been raised about the increased usage of online gaming like lack of clear definitions between skill-based gaming and gambling introduces regulatory ambiguity sparking ethical debates and diverse interpretations about the nature of these gaming activities.”

The Internet and Mobile Association of India (IAMI) responded by saying that to “operationalise the amended IT Rules to effectively govern, administer, and regulate the online gaming industry in India… In case there are overarching concerns regarding the regulatory structure, it would be advisable to promptly devise necessary amendments to resolve them and obviate any regulatory ambiguity.” The IMAI included members such as Dreamil and Games 24×7. India Tech, which is also an industry pressure group, wrote to TRAI saying that for the sake of regulatory clarity online gaming regulation should be handled by Meity “to ensure consistency and avoid potential confusion.”