Centre appoints MeitY as the nodal ministry for gaming, to set rules soon

The Ministry of Electronics and Information Technology (MeitY) would be the nodal ministry for matters relating to online gaming with monetary risks, said a gazette notification on Tuesday. This move clears the way for a policy on such online gaming, which is expected in two-three weeks.  

The official release also stated that the Ministry of Youth Affairs and Sports (MYAS) has been tasked with regulating esports (video games not involving money) as part of multiple sports events.

“The Narendra Modiji’s govt is committed to fully encouraging tech innovation, but also to ensure no illegal content/services possible. MeitY will soon publish Rules for online gaming intermediaries and start public consultation on the same,” MoS for Electronics and IT Rajeev Chandrasekhar said in a tweet.

India’s gaming market is currently estimated at $2.6 billion and expected to be worth $8.6 billion by 2027, growing at a compound annual growth rate (CAGR) of 27 per cent. The industry includes unicorns, such as MPL and Dream11, which have close to 100 million users each.

The industry came under scrutiny after the proliferation of games like cards, casinos, and fantasy sports among young people led to addiction and financial losses, with some reported cases of suicide. As reported earlier, the online gaming policy is likely to prescribe a mandatory age verification mechanism and know-your-customer (KYC) norms for all real money games in the country. 

The policy, which aims to address concerns around user safety and financial harm from real money games, would be made part of the Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021. According to sources, the ministry is also likely to prescribe the formation of a self-regulatory organisation (SRO) for the industry.

The central government in May 2022 set up an inter-ministerial task force to work on regulations for the online gaming industry and identify a nodal ministry to look after the sector. The panel included secretaries of multiple ministries and the CEO of the NITI Aayog.

The allocation of a nodal ministry for the sector has resolved a long-standing debate on considering gaming platforms as intermediaries or publishers. MeitY, the Ministry of Information and Broadcasting, and the Ministry of Consumer Affairs were considered to be key contenders to govern the sector.

The industry stakeholders have welcomed the decision. Joy Bhattacharjya, director-general of the Federation of Indian Fantasy Sports (FIFS), said: “The appointment of MeitY as the central regulatory authority will provide clarity and certainty to investors, industry, and consumers. The decision is in line with the government’s initiative to push for growth of the AVGC (animation, visual effects, gaming, and comics) sector and make India a global hub for online gaming. We are sure that the online gaming industry will grow responsibly under MeitY’s guidance and the industry is looking forward to working with MeitY in creating a well-balanced regulatory framework.”

The appointment may also bring uniformity in regulations on real money games across the country, as demanded by industry stakeholders. According to the Constitution, betting and gambling are part of the state list. Many states have adopted laws in line with the Public Gambling Act, 1867, a British-era law that created a distinction between games of skill and chance.

The Government of Tamil Nadu recently passed a law to ban online gambling. The Kerala government last year imposed a ban on online rummy for stakes, which was later lifted by the Kerala High Court.