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This news piece is based on ‘Online gaming draft rules: No betting, self-regulatory body’ published in The Indian Express on January 03, 2023.  

Why in News?  

Recently the Ministry of Electronics and IT (MeitY) has released the draft rules for online gaming.  

The proposed rules have been introduced as an amendment to the Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021. 

What is an Online Game 

The term “online game" as “a game that is offered on the Internet and is accessible by a user through a computer resource if he makes a deposit with the expectation of earning winnings". It allows only “games of skill" to operate legally in India.  

Games of skill have been defined through various court rulings in India and include games like rummy and the Dream11 model of online fantasy sports. 

About the Proposed Rules 

The proposed rules aimed at safeguarding users against potential harm from skill-based games.  

Its objective is to grow the online gaming sector and encourage innovation and to bring online real money gaming platforms under the IT (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021, which also regulates social media platforms. 

The government also recommends creating a self-regulatory organization (SRO), self-regulatory framework, mandatory KYC verification of players, the appointment of compliance and nodal officers, and having a physical address in India. 

The self-regulatory will have a board of directors with five members from diverse fields. It must ensure that registered games don’t any anything which is not in the interest of sovereignty and integrity of India, defence, friendly relations with foreign states or public order or intices the commission of any cognizable offence. 

There could be more than one self-regulatory body and all of them will have to inform the Centre about the online games they have registered. 

It also recommends additional due diligence to be observed by gaming firms, including publishing measures taken to protect user deposits and informing the user about the “risks of financial loss and addiction associated with online games". 

Adhering to the guidelines in the IT Rules will give gaming firms safe harbour protections defined under Section 79 of the IT Act.   

Online gaming companies will not be allowed to engage in betting on the outcome of games.