Online Gaming: Talks begin for central regulatory framework

The government is exploring the need for a central regulatory framework for the online gaming industry to bring about uniformity in the way it is regulated in the country.

Policymakers have begun preliminary discussions on creating such a framework that could entail setting up a separate regulatory body and require compulsory registration of online gaming companies. The regulator would have the powers to block unregistered platforms and the operators must do user verification through the know-your-customer procedure to protect minor players from exploitation, as per the early discussions.
All stakeholder ministries including the Ministry of Electronics and Information Technology, home affairs and finance are looking into the pros and cons of the issue and growing concerns around use of these platforms in laundering or tax evasion. Officials from these ministries are expected to meet this week to discuss these issues.


Officials privy to the deliberations on the matter said a report by the inter-ministerial panel on online gaming had made a fresh push for a centralised framework, as it is increasingly felt that state-level regulations may not be enough to deal with the issues posed by online gaming and divergence in regulations across states would further complicate the situation.

"Discussions are on ... The report by the inter-ministerial panel on online gaming is being examined," said an official.

Divergence Frameworks
While betting and gambling are covered under the state list, there is no mention of 'online gaming' in any lists as these were formulated pre-Internet. Meghalaya, Sikkim and Nagaland have implemented a licensing mechanism for online gaming and gambling, while some states such as Telangana, Andhra Pradesh and Odisha have prohibited both online gaming and online gambling. Tamil Nadu has brought an ordinance to ban online gaming in the state.

It is felt that it may be difficult to block apps or websites at the state level, rendering their bans ineffective, the official said, adding that the issue can be dealt with more effectively only when complemented with a central framework.

States cannot also block access to offshore foreign gambling websites, the official added.

The Centre has powers to bring in such a framework. Under Article 249 of the Constitution, Parliament can assume legislative authority over a subject on the State List if it has become a subject of 'national interest'.