KYC, Self-Regulatory Body: Key Takeaways From The Draft Rules For Online Gaming

The Ministry for Information and Technology (MeitY), earlier this week, released draft rules for online gaming to ensure "conformity with Indian laws" and "safeguard" gamers against potential harm.

The draft rules proposed establishing a self-regulatory body that will take up the responsibility to register online games and put in place a grievance redressal mechanism. The rules aim to regulate online gaming platforms as intermediaries. It defines online gaming intermediaries as "an intermediary that offers one or more than one online game".

The draft rules were introduced as an amendment to the Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021, and released for it public consultation.

"The draft amendments are aimed at addressing the said need, while enabling the growth of the online gaming industry in a responsible manner," the Ministry of Electronics and Information Technology said.

In a press briefing on January 2, Minister of State for Electronics and IT, Rajeev Chandrasekhar said while the rules were "simple", the Centre envisioned a bigger role for startups in the online gaming industry. "The rules are simple - we would like the online gaming ecosystem to expand and grow and be an important catalyst to India's One trillion dollar Digital economy goal by 2025-26," he said.

While there has been no change in the age limit for online gaming, Chandrasekhar said it was important to keep the "gaming ecosystem safe" since 40-45% of online gamers were women.

Here are some key takeaways from the draft rules:

Self-regulatory bodies

The intermediaries that offer online games will need approval from a self-regulatory body, registered with the MeitY. The registration has to be clearly displayed on the website and mobile phone application.

"The online gaming intermediary shall display a demonstrable and visible mark of registration on all online games registered by the self-regulatory body," the draft rules specify.

According to the draft, the self-regulatory body's board of directors will have an "eminent" person from the field of online gaming, sports, or entertainment; a representative of online gamers; an individual from the field of psychology, medicine or consumer education; and a communication expert. The governing body will have an expert from public policy, public administration, law enforcement, or public finance, nominated by the Centre.

Under the new rules, online games will need to conform to Indian laws and gambling and betting won't be allowed.

Self-harm and addiction

The self-regulatory bodies will need to establish a framework to protect online gamers, particularly children. When considering a game for registration, the body must ensure online gamers are protected from addiction and other harm, including self-harm.

It also needs to consider safeguards against children who play online games and protect users from financial loss and fraud. As part of the measures to safeguard users, the regulatory bodies will have to share with the Centre the basis on which a game has been approved. The rules read, "Every self-regulatory body registered under this rule shall communicate the fact of recognition of every online game registered with it to the Central Government, along with a report regarding the bases on which it has recognised it as such."

The safety measures include a warning message if a person spends beyond a "reasonable duration for a gaming session". The intermediaries also need to inform the users of financial risks and the measures taken for the protection of deposits made by a user.

User safety

While there will be a know-your-customer procedure for account registration, according to the draft rules, users can register themselves using an Indian mobile number.

"The online gaming intermediary shall enable users who register for their services from India, or use their services in India, to voluntarily verify their accounts by using any appropriate mechanism, including the active Indian mobile number of such users, and where any user voluntarily verifies their account, will also need to enable users to verify their accounts using a enable users who register for their services from India, or use their services in India, to voluntarily verify their accounts by using any appropriate mechanism, including the active Indian mobile number of such users," the draft rules say.

The data collected for this cannot be used for any other purpose, "unless the user has expressly consented to such use".

Grievance redressal

According to the draft rules, the intermediaries will have a Grievance Officer and a Chief Compliance Officer "who shall be a key managerial personnel or such other senior employee of the online gaming intermediary who is resident in India".

It will also need to set up a mechanism for receiving complaints in case of violation of the rules and find time-bound resolutions to complaints. Every complainant has to be able to track the status of their complaint or grievance through a unique ticket. The intermediaries will also have to provide the complainants with "reasons for any action taken or not taken by it in pursuance of the complaint or grievance received by it".

Aside from the Chief Compliance Officer, intermediaries also need to appoint a nodal contact person who is an employee and a resident of India. The nodal contact person will coordinate 24x7 "with law enforcement agencies and officers to ensure compliance with their orders or requisitions made in accordance with the provisions of law or rules made thereunder".