Govt may shelve self-regulation plan if egames majors dominate SRBs

SRBs must have experts in education, psychology, and child rights, according to government

The government is concerned that major gaming firms could end up having a dominant presence in the self-regulatory bodies (SRBs) meant for online real money gaming. Sources said that if the Ministry of Electronics and Information Technology (MeitY) finds that SRBs are being backed by big players and that the bodies lack independence, government certification of games will be considered instead of self-regulation.    

Currently, a committee at the MeitY is analyzing three applications to form SRBs —likely to be responsible for certifying a permissible real money game. The applications, submitted before the July 6 deadline,  include those from the All India Gaming Federation (AIGF), the Esports Players Welfare Association (EPWA), and a joint one from the E-Gaming Federation (EGF) and the Federation of Indian Fantasy Sports (FIFS).

Members of the AIGF include online gaming majors like Mobile Premier League, Deltatech Gaming, Nazara, Paytm First Games, and Zupee. Games24x7 and Junglee Games are members of the EGF, while the FIFS includes members such as Dream11 and Fantasy Akhada, in addition to over a dozen fantasy sports startups. Though the industry bodies have hundreds of other online gaming companies as their members, the influence of a few big firms has created concerns about their applications, sources said.

AIGF, EGF, and FIFS did not respond to queries sent by Business Standard till the time of going to press.

“The idea of SRB is that you don’t want the government to certify the permissible games. That doesn’t mean a few big companies will do it. It has to have representation from all the stakeholders. There has been a slight backlog due to other legislations, but we will make it clear very soon,” a senior government official said.

As per the new rules notified in April, the government made it mandatory for all online real money games to display a mark stating that the game is verified by the SRB among other obligations. The SRBs to enforce these rules have not been formed to date.

When asked whether there was a possibility that the government may go back to the drawing board to create a certifying framework, the official said it could not be ruled out if there was a conflict of interest among the proposed board of directors. This may add to the regulatory uncertainty for the $2.2-billion sector.

“If there is no SRB that makes the cut (for the requirements of the rules), the government will have to step in and start regulating the sector. It is the industry’s desire that the government should not have stringent regulations. But we are still checking if these applicants are really meeting the test of having independence and whether they have an arm’s length distance from a few big companies,” another official said.

“We will not allow industry capture of an SRB. Because these are the first SRBs we are experimenting with,  we can’t let it go wrong,” the second official added.

The current ambiguity over the legal status of real money games has also created confusion for digital platforms displaying advertisements of online gaming apps. A recent advisory by the ministry of information and broadcasting has asked television, print, and digital media (including social media) to refrain from publishing advertisements of games not certified as “permissible online games.” However, an executive of a social media platform said the directive cannot be complied with unless there is an SRB to certify games.