The Online Gaming (Regulation) Bill, 2022: Hits and Misses

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Introduction

The Online Gaming (Regulation) Bill, 2022 (“Bill”) was introduced in the Lok Sabha on April 1, 2022 to establish an effective regime for regulating online gaming industry to prevent fraud and misuse. Acknowledging the effects of addictive features of online gaming and noting the profound impact of the gaming industry on the nation, the Bill calls for institution of a regulatory commission to regulate the online gaming industry.

Highlights of the Bill

The definition of “Online Gaming” under the Bill includes any game played on the electronic devices such as personal computers, mobile phones, tablets, and other devices. Since the definition does not differentiate between ‘game of skill’ and ‘game of chance’, it is apparent that the Bill aims to regulate all kinds of games played on such electronic devices.

The Bill encompasses constitution of a regulatory commission namely, Online Gaming Commission (“OGC”) consisting of five members nominated by the Central Government, with at least one expert each from the field of law, cyber technology and one person with experience in law enforcement. The OGC will be empowered to, inter alia, oversee the functions of online gaming websites; make periodical or special reports on matters pertaining to Online Gaming; suggest appropriate measures to control and curb illegal Online Gaming; grant, suspend and revoke licenses for online gaming websites and determine the fee for license applications and license renewals of such websites.

The Bill proposes to prohibit engagement of Online Gaming without a website and a non-transferrable and non-assignable license. Any person operating an online gaming server or an online gaming website without such license is punishable with imprisonment up to three years along with fine. The license will be valid for a term of six years.

The license proposed to be granted under the Bill may be suspended or cancelled if the licensee breaches any of the conditions of the license or, contravenes any of the provisions of the Bill. However, the Bill excludes its application to any person providing backend services in India including hosting and maintenance services for any international gaming website based outside India.

Hits and Misses

The Bill draws similarity from a private member bill namely the Sports (Online Gaming and Prevention of Fraud) Bill, 2018 (“Sports Bill”) introduced in the Lok Sabha on December 28, 2018, which has thereafter lapsed. Similar to the Sports Bill, the Bill proposes to, inter alia, introduce regulations relating to constitution of a regulatory commission, license for online gaming server/ website, foreign direct investment and technology collaboration in online gaming. However, the Bill has not included provisions in relation to various key issues, including data protection of the users, geographic restrictions and exclusions, and customer grievance mechanism. Whilst the Bill is a welcome step in regulating the online gaming sector, the legal framework envisaged under the Bill does not address some of the key areas of concerns in the online gaming ecosystem, such as a strict regulatory framework for the conduct of the platforms in the online gaming sector which is essential at this juncture. Given the persistent growth of online gaming market in India, it may be seen as an opportunity for the legislators to have in-depth discussions during the parliamentary sessions on the Bill and analyse the uncertainty relating to appropriate rules in this sector. The Bill may be further amended to include robust provisions for protecting the interests of the online gamers as well as the stakeholders.

AUTHORS

Ambuj Sonal, Associate Partner, Link Legal

Subham Biswal, Associate, Link Legal

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