Centre Plans Federal Oversight Of All Real-Money Online Games: Report

The much-awaited regulations are seen shaping the future of India's gaming sector will be worth $7 billion by 2026, dominated by real-money games, says Redseeer

The drafting of the new regulations comes amid growing concerns that the proliferation of such games, particularly among young people, had led to addiction and financial losses, with some reported cases of suicide.

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The Centre planned regulation of online gaming will apply to all real-money games after the prime minister’s office (PMO) overruled a proposal to only regulate games of skill and leave out games of chance, citing a government document and three sources news agency Reuters reported on Monday.

According to research firm Redseeer, the much-awaited regulations are seen shaping the future of India's gaming sector will be worth $7 billion by 2026, dominated by real-money games. Recently, Tiger Global and Sequoia Capital have backed Indian start-ups Dream11 and Mobile Premier League, popular for fantasy cricket.

A government panel tasked with drafting the regulation in August proposed a new body to decide whether a game involves skill or chance, and then let skill games be governed by planned federal rules that call for registration requirements, know-your-customer norms, and a grievance redress mechanism.

Chance games, considered akin to gambling, which is mostly banned across India, were set to stay under the purview of individual state governments which would be free to regulate them, Reuters reported earlier. However, in a meeting on October 26, an official from the PMO objected to such a differentiation, calling for expanded oversight on all types of games, according to the confidential minutes of the gathering reviewed by Reuters.

Differentiating games as skill or chance wasn't easy due to lack of legal clarity and contrasting court decisions, the minutes quoted the official as saying, adding "online gaming may be considered as one activity/service with no distinction."

Defining games has been contentious in India. The Supreme Court says the card game rummy and certain fantasy games are skill-based and legal, for example, while different state courts have held different views about games such as poker.

The PMO and the IT ministry, which is drafting the rules, did not respond to a request for comment. Three people directly involved in the rule-making process, including two government officials told Reuters that the rules will give the federal administration broader oversight on all types of games while state governments remain empowered to impose outright bans on gambling, or games of chance.

The drafting of the new regulations comes amid growing concerns that the proliferation of such games, particularly among young people, had led to addiction and financial losses, with some reported cases of suicide.

One of the sources said Modi's administration continues to be concerned about potential addiction of such platforms.

The government panel's August report had recommended new rules should include so-called "de-addiction measures" such as periodic warnings and advisories and fixing deposit and withdrawal limits.