The Ministry of Electronics and Information Technology on Thursday notified the amendments to the legislation on online gaming. With that, online ‘money’ games involving wagering or betting will fall foul of the new rules. (An ‘online real money game’ is one in which participants deposit a particular amount of money with the expectation of walking away with a reward.)
Online games are broadly split into two: games of chance and games of skill, in which the first one is categorised as gambling, while the other one is considered legitimate.
Fantasy sports, which allow people to make virtual teams and make money from points earned by virtual avatars based on a player’s real world performance, is considered a game of skill. Since gamers aren't putting their money directly on a match or an event, their actions aren't seen as betting.
The clarity issued about what's permissible and what is not will enable startups to offer options for gamers accordingly.
According to Minister of State for IT Rajeev Chandrasekhar, multiple self-regulatory organisations (SROs) will be empowered to vet online gaming apps and decide if their operations are permitted or not. The SROs will represent all stakeholders from the industry. Whether or not a game is permitted will be determined by the fact whether wagering is involved. “If wagering is involved, the SRO will be in a position to say that those online games are not permissible,” the minister said.
Online betting games thatinvolve real money banned
It is now obligatory for intermediaries to make reasonable effort to not host, publish or share any online game that can cause users harm, or one that has not been verified as a permissible online game by the self-regulatory body.
Earlier this year, Finance Minister Nirmala Sitharaman announced that gamers will have to pay a 30 per cent tax on their annual winnings.
Welcoming the move, Roland Landers, CEO, All India Gaming Federation, said: “These rules will go a long way in promoting consumer interest while helping the industry grow responsibly and transparently. It will also help in curbing the menace of anti-national and illegal offshore gambling sites, which have been proliferating in the last few years.”
Reacting to the amended rules, Joy Bhattacharjya, Director-General, Federation of Indian Fantasy Sports, said, “The notification of rules marks a pivotal moment for the online gaming industry in India. It is expected to put an end to the ambiguities that the industry was grappling with and lay the foundation for sustainable and responsible growth of the industry. India’s online gaming industry has already attracted $2.5B in FDI and we are hopeful that this will propel the industry to great heights and encourage innovation.’’
What does this mean for fantasy sports and online games?
Online gaming is divided between games of chance and games of skill, in which the first one is categorised as gambling, while the other one is considered legitimate.
Fantasy sports, which allow people to make virtual teams and make money from points earned by virtual avatars based on a players real world performance, is considered a game of skill.
Since gamers aren't putting their money directly on a match or an event, their actions aren't seen as betting.
The clarity issued about what's permissible and what isn't, will enable startups to offer options for gamers accordingly.
