Permissible Online Real Money Games: Criteria and Verification

Online gaming Self Regulatory Bodies (“SRBs”) have been granted authority by the Ministry of Electronics and Information Technology (“MeitY”) to verify online real money games. An online real money game is considered permissible if it has been verified by an SRB.

Entities seeking designation and recognition as SRBs must be composed of members or representatives from the gaming industry. The MeitY is empowered to suspend or revoke the designation of an SRB if it is satisfied that it is necessary to do so.

SRBs are required to publish a framework for verifying online real money games, ensuring that these games do not undermine India’s sovereignty, integrity, security, or public order. They must also provide measures to protect users, especially children, by implementing parental controls, access restrictions, or age-rating mechanisms.

SRBs must consider the ways to prevent gaming addiction, financial loss, and fraud, such as displaying of repeated warning messages during extended gaming sessions and enabling users to set personal limits for time and money spent.

In determining the permissibility of an online real money game, SRBs must ensure that the game does not involve wagering on outcomes and that both the online gaming intermediary and the game comply with due diligence measures and the SRB’s framework. The list of permissible online real money games, along with details of the applicant and validity period of verification, is to be published by SRBs on their websites and mobile applications.

The existence of multiple SRBs raises concern about their interplay and decision-making processes, especially when evaluating a game rejected by one SRB but accepted by another. Additionally, SRBs will comprise representatives from the gaming industry, establishing clear operating rules is crucial to prevent favoritism, bias, and prejudice during game assessments and ensure transparency in the process.

Permissible Games 

The MeitY has introduced new regulations primarily aimed at online real money games, which came into effect on April 6, 2023. These regulations, known as the gaming amendments, have been incorporated into the Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021 (IT Amendment Rules, 2023).

The gaming amendments specify certain online games as permissible. 

• A permissible online game is defined to mean a permissible online real money game or
• Any other online game that is not an online real money game. 

An online game is defined as a game that is offered on the internet and is accessible by a user through a computer resource or an intermediary.

Specific regulations are provided for Permissible Online Real Money Games (“PORMG”).  For other online games there are no specific regulations, but MeitY has the power to apply certain obligations under the IT Rules to other online games as well, if it believes it is necessary to do so on certain grounds, as discussed hereafter. 

A PORMG needs to satisfy two criteria:

• It needs to be an ‘online real money game, that is, ‘online game where the user makes a deposit in cash or kind with the expectation of earning winnings on that deposit.’ ‘Winnings’ is defined in relation to ‘cash or kind.’⁶Thus, games where there are no deposits and winnings do not fall in this category.
• Such online real money games need to be verified by an online self-regulatory gaming body (as explained later). 

Accordingly, the gaming amendments treat:

• online real money games registered with self-regulatory bodies, and
• online games which are not real-money games, (i.e., games where there is no deposit or winnings), as permissible under their scope. 

Banned Games: Prohibited Categories in Online Gaming Regulations

The new rules for online gaming prohibit any game that involves betting and wagering. Permissibility will be determined with the simple principle of whether wagering is involved. “We are only regulating real money games that involve wagering. By process of exclusion, all other kinds of games will be permissible,” MoS IT Rajeev Chandrasekhar said.

The minister further said that SRO can declare online real money games as permissible if it is satisfied that “the online real money game does not involve wagering on any outcome.”

Authority to Impose Obligations on Online Games

The MeitY has the power to extend the following obligations as applicable to PORMG to other online games as well, in the interest of the sovereignty and integrity of India or security of the State, friendly relations with foreign States, public order, or preventing user harm. 

• It may direct an Online Gaming Intermediary (“OGI”) in respect of such online game to observe obligations under certain clauses as if it is a PORMG, with the necessary changes.
• It may specify the period within which the OGI must observe the obligations.

MeitY will determine and communicate the timeframe within which the OGI, facilitating access to such online games, must comply to these specified obligations.