Gaming industry welcomes proposed guidelines on self-regulating body

The industry, which broadly welcomed draft amendments in the IT Rules to regulate online gaming, has raised some concerns about the ambiguity around certain aspects such as between games of chance and games of skill and issues pertaining to the sharing of intellectual property rights of games with the self-regulating body which may comprise executives from competing firms.

“The SRO will be the fundamental building block of the new policy. So, it is important to understand how this will be formed and who will be on it,” said Nitish Mittersain, chief executive of Nazara Gaming.

He said it was important to ensure that the SRO would be well governed and fair to all developers and companies.

One of the proposed guidelines states that all games have to be registered with the SRO, but there is no clarity on the process or requirements.

“There is no clarity on the mechanism or threshold for registering games by the SRO,” said Abhishek Malhotra, managing partner, TMT Law Practice.

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This means that, in case a game is rejected by the SRO, the developer would have no means of grievance redressal.
The current guidelines are also not clear on whether the SRO would be required to analyse the game before registering it.

“The SRO would be made up of industry members and, if this is the case, then it means that members would have access to intellectual property of a competing company even before the game is launched,” said Saumya Singh Rathore, co-founder, WinZO.

While the initial draft has been lauded as a positive step towards consumer protection, the industry is hopeful that the final Bill will be less ambiguous on these aspects, such as the distinction between games of skill and chance, an ongoing issue.

“This clarity will make it easier to bring in investment and create jobs, which will boost the ecosystem,” said Rajan Navani, chairman, JetSynthesys.

According to another provision in the draft, any game that isn’t against the law at that point in time can be registered.

“This is a bit open-ended as some laws have been enacted by state governments and this could mean that if the game is in violation of one of these laws then it cannot be registered, which could lead to conflict,” said TMT’s Malhotra.

Taxation also requires clarification, said Satyam Rastogi, founder and CEO of Khiladi Adda & GamerPe.

“It’s not clear whether the current guidelines we follow for TDS would continue or it would change,” he said.

There is consensus that the sooner these guidelines come into effect, the better it would be for the industry.

Mobile gaming is expected to be a $5 billion industry by 2025, according to a report by BCG and Sequoia India.

“The new draft online gaming rules signify the continued push towards promoting innovation and digital transformation in India. They will also bring clarity and certainty for investors, industry players and consumers… Progressive regulations will help bolster investor confidence, entrepreneurial energy and job creation in this promising sector,” said Rajan Anandan, managing director, Sequoia India and SEA & Surge.

(Illustration by Rahul Awasthi)