Relevance: GS-2: Government policies and interventions for development in various sectors and issues arising out of their design and implementation.

Key Phrases: Online Gaming (Regulation) Bill, 2022, gaming industry, game of skill, Know Your Customer, E-Sports, Fantasy Sports, Online Casual Games, gambling, immoral, social lives and relationship, cheating, privacy violations, abuse, and bullying, Gaming Authority.

Why in News?

• The Bill, which seeks to curb illegal online gaming, may be highly regressive as it fails to draw a distinction between casual gaming and real money gaming platforms.

Context:

• The Online Gaming (Regulation) Bill, 2022, which was introduced in the Lok Sabha on 1 April 2022, aims at preserving integrity in online gaming and introducing a regulatory regime for online gaming, as has been mentioned in the Statement of Objects and Reasons of the Bill.
• According to Statista.com, the market value of the gaming industry in India was nearly a billion US dollars, but could go up to $ 3.4 billion by 2024—because of the youthful population of the country.

What the Bill proposed?

• The Bill brings under its ambit all forms of online gaming irrespective of whether it is a game of skill or chance. It seeks to establish a ‘watch-dog’, an Online Gaming Commission (Commission), to be constituted by the Central Government, with powers to oversee the functioning of online gaming websites and take measures to curb illegal online gaming.
• Further, the Bill envisages a licensing regime and empowers the Commission to grant, suspend and revoke licenses for online gaming websites. It also bars any entity from operating an online gaming server or an online gaming website without a licence—doing so would be a punishable offence. However, the Bill excludes persons providing backend services in India, including hosting and maintenances services, for any international gaming website based outside India.
• Additionally, the Commission would have the power to formulate rules relating to licensing, manner of keeping accounts, persons who may be permitted to play online games, organisation or exhibition of online games, conditions for admissions of participants and the fees to be charged, notices to be put on the online gaming website and conditions regarding providing credit facilities by a licencee to players of online games, regulation of participation by proxy in online games, etc.
• Lately, various courts in India have nudged the State governments to look into the legislative void around online gaming in the state specific legislations. The Bill seeks to put in place various checks and balances by delegating regulatory powers to the Commission.

Shortcomings of Online Gaming (Regulation) Bill

• However, the Bill may be highly regressive as it fails to draw a distinction between casual gaming and real money gaming platforms. The need of the hour is to have a regulatory framework for real money gaming and not casual gaming, which is already governed by various other legislations.
• Further, the Bill does not draw from the licensing regime currently in place for real money games in certain laws passed by a few North-Eastern states of India.
• The Bill seeks to establish a centralised agency by the Central Government which would have powers to regulate online gaming. However, the Bill, if passed, may face legal hurdles as gambling has been a ‘state-subject’ and the Bill vests the regulatory powers to an agency to be created by the Central Government, i.e., the Commission.
• The Bill also fails to address certain impending issues like Know Your Customer (KYC) norms, customer grievance mechanisms, data protection of the users and other societal issues.

Why Online Gaming in India Needs Regulation?

• Online gaming industry suffers from lack of regulatory oversight. Online gaming falls in a regulatory grey area and there is no comprehensive legislation with respect to its legality, or its boundaries with gambling and betting even as the applicable tax rate is being debated in relevant circles.
• From this definitional issue flows the legality of online gaming. Games based on skills are allowed in most parts of the country while games of chance are in the ambit of gambling, treated as immoral and prohibited in most parts of the country. As betting and gambling is a state subject, different states have their own legislation.
• Every state in India, except Goa, Sikkim, and the Union Territory of Daman explicitly prohibits any sort of gambling, betting or wagering on games of chance. Assam, Andhra Pradesh, Nagaland, Odisha, Tamil Nadu and Telangana have placed restrictions on games of skill as well. Online games based on the traditional ludo, arguably the most popular online game in India, have run into controversy, and allegations of betting and gambling.
• Notwithstanding the legal position, a large number of people are developing a strong dependence on online gaming. This addiction is destroying lives and devastating families. Compulsive usage of technology was heading towards becoming an issue and the pandemic managed to catalyse the steady journey. It has caused a dramatic increase in our screen time.
• Parents across the country are struggling — without much success — to help their children set limits around technology usage and gaming. Young boys and girls are trapped in compulsive gaming, many spending as much as six to eight hours per day playing online games. This is affecting their performance in school and straining their social lives and relationships with family members.
• Psychologists have opined that the opportunity cost of this is immense as the impact on health is growing with each passing day. Online games like PUBG and the Blue Whale Challenge were banned after incidents of violence and suicide. This addiction is also said to be causing near-sightedness in our youth. Further, inadvertent sharing of personal information can lead to cases of cheating, privacy violations, abuse, and bullying.

Way Forward:

• There is an urgent need to regulate this industry suitably. The government should ensure that KYC norms are strengthened. Each game should follow a well-established age-rating mechanism and minors should be allowed to proceed only with the consent of their parents — OTP verification on Aadhaar could potentially resolve this.
• No in-game purchases should be allowed without adult consent and wherever possible, the in-game chat option should be disabled. Gaming companies should proactively educate users about potential risks and how to identify likely situations of cheating and abuse. They should remove the anonymity of participants and build a robust grievance handling mechanism.
• A Gaming Authority at the central government should be created while various forms of self-regulation are encouraged for the industry. This authority could be made responsible for the online gaming industry, monitoring its operations, preventing societal issues, suitably classifying games of skill or chance, overseeing consumer protection, and combatting illegality and crime.

Source: The Hindu BL

Mains Question:

Q. Why does online gaming in India need regulation? Examine the provisions in the Online Gaming (Regulation) Bill, 2022. (250 works).