The new regulations introduced by MeITy need to expand beyond gambling games and include guidelines on ethical gameplay and consumer protection
The gaming market has been an unlikely unifier with the increase in technology adoption. What was previously considered a male-dominated field, with gaming companies established outside of India, has now grown to include 18 percent female users and over 17,000 Indian-published games. This increase is on a steady incline. The online gaming market in India had a revenue of US$2 billion in the Financial Year (FY) 2021. The market size increased by approximately 30 percent to a revenue of US$2.6 billion in FY22.
On 6 April, the Ministry of Electronics and Information Technology (MeITy) released its updated amendments regarding the IT rules. These include new guidelines and ethics to govern “online gaming and fake or false information about Central government business.” This article will focus on the scope of online gaming beyond gambling and wagering that the regulations have overlooked.
In the amendments on online gaming, similar to the draft released in January for public consultation, the protection of users is determined in two main ways: Age verification and Know-Your-Customer (KYC) requirements, which include parental/guardian consent, and grievance redressal methods.
However, the E-gaming Federation has already implemented these in the gaming organisations it oversees. Thus, the main novelty of the amendments is the Self-Regulation Organisations (SROs) that govern gaming applications and websites.
If a company deals with only gaming and does not offer rewards on game outcomes, then it does not need to approach an SRO.At the launch press conference, Union Minister of State for Electronics and Information Technology, Rajeev Chandrasekhar, mentioned that the new amendments are not meant to delineate between games and the intended gameplay. Therefore, if a company deals with only gaming and does not offer rewards on game outcomes, then it does not need to approach an SRO. That is, only gaming companies that involve wagering will be covered under these amendments. Further, he stated that MeITy has no detailed definitions of what comprises “user harm”, which will require SRO intervention in the amendments. Instead, the SRO will outline these definitions so that they can develop with the industry or individually. One of the main criticisms against these regulations is their narrow focus on wagering games. Across the internet, especially with the developing immersive games and gaming worlds, the scope for partaking in wagering is becoming more prominent, even in non-wagering games. A ban only diminishes legal control outside of jurisdictional areas. The SROs are to govern all gaming organisations, allowing them the power to determine what is permissible gaming, wagering, and gambling. However, disallowing wagering platforms will only encourage law avoidance—creating games that try to avoid getting tagged as a wagering game without changing their service and creating alternative forms of gambling not currently governed. This has been seen in many existing video games, like using alternate online platforms like Discord to wager on outcomes of leading gamers or in the controversy around Electronic Arts (EA) sports loot box, which encouraged users to make in-game purchases and exchanges linked to gambling.
The in-app purchases and exchanges have created a black market inside gaming platforms, allowing those willing to spend more on said media platforms to win over those who are not making in-app purchases.Real Money Trading (RMT) is not the only concern regarding addiction, gambling, and fraud in online gaming. Since transactions are recorded and traceable, these are hard to counterfeit, unlike in physical casinos and gambling centres. Online games that measure skill, practice, and patience now have in-app purchases, transforming into ‘pay-to-win’ games<1>. The in-app purchases and exchanges have created a black market inside gaming platforms, allowing those willing to spend more on said media platforms to win over those who are not making in-app purchases. These underground economies create opportunities for malicious users to form alternate ways to exchange RMT while avoiding any restricting laws or transaction costs. These regulations try to establish an “open and safe, trusted, and accountable” internet. However, the amendments fail at effectively governing the movement of money and user integrity with its superficial definition of addiction, focusing only on gambling addiction or when the exchange of money is in play rather than focusing on governing online gaming’s psychological and social impact, which is only augmented by outsourcing authority to SROs. Further, despite their attempt at targeting, with their ambiguity, a more extensive base of online platforms, these regulations ignore the scope of online transactions on Massively Multiplayer Online Role-Playing Games (MMORPGs). In these MMORPGs, players can create smaller groups, economies, and worlds on Local Area Networks (LANs) to play, compete, trade, and gift platform currency that can translate into real-world goods and money. Another possible field of exploitation is Gold farming. Gold farming refers to a user playing a game to purchase all the desirable goods inside the game and then selling them at a higher cost to bidders for real-life money. A significant number of cases of Gold farming are seen in China, where companies have hired individuals to work shifts on gaming platforms, accumulate rewards, and then sell them to other players at a higher cost for RMT.
Gold farming refers to a user playing a game to purchase all the desirable goods inside the game and then selling them at a higher cost to bidders for real-life money.The previously mentioned growth in the Indian gaming market to US$8.6 billion by FY27 depends on in-app purchases. This growth in the gaming sector highlights the need to govern not only gambling apps and websites but also gaming apps that may have game-based currencies and exchanges. These governance tools need to ensure user protection from unethical purchases and fraud.
The current regulations focus only on direct gambling, not alternate forms of harm such as psychological and social dependence and in-game wagering, ignoring the importance of user agency and autonomy.The changes included in this iteration of amendments to the IT rules do not, thus, prioritise the right to a safe and open internet, as MeITy stated during its release. These amendments lack clarity on what needs to be governed to reduce gaming addiction and unethical use of gaming platforms. The current regulations focus only on direct gambling, not alternate forms of harm such as psychological and social dependence and in-game wagering, ignoring the importance of user agency and autonomy. Taxation on online gaming is a step forward in limiting gaming and gambling addictions. However, the suggested 30 percent tax on online gaming earnings and focus on regulating wagering games, instead of all online gaming, indicates a superficial interest in monetary growth in the gaming sector over actual civil responsibility towards users, protecting them against physical and mental harm and addiction. The regulations, thus, need to expand to include aspects of gaming that aren’t quantified under monetary transactions and include guidelines on ethical gameplay and consumer protection. This expansion of the new amendments will ensure that gaming is seen as an online platform that engages users as much as social media does, and is not seen as a one-dimensional facet of the internet.
The views expressed above belong to the author(s). ORF research and analyses now available on Telegram! Click here to access our curated content — blogs, longforms and interviews.
Shravishtha Ajaykumar is Associate Fellow at the Centre for Security, Strategy and Technology. Her fields of research include geospatial technology, data privacy, cybersecurity, and strategic ...
Read More +
PREV
