Draft Rules for Online Gaming

General Studies Paper-2

Context

• The Ministry of Electronics and IT (MeitY) has released draft rules for online gaming.

About

• They are intended to operationalise the Promotion and Regulation of Online Gaming (PROG) Act, 2025.
• It bans real money gaming (RMG) platforms such as online poker, rummy and fantasy sports while permitting only social games and e-sports.

Major Provisions

• Online Gaming Authority of India: It proposes the creation of the Online Gaming Authority of India (OGAI) as a dedicated regulator to oversee online gaming.
  • The authority will have quasi-judicial powers, including summoning individuals, examining evidence, and issuing binding orders.
  • Composition: Chairperson and 5 members from different ministries.
  • Functions: To decide whether a game is an “online money game”.
    • It will register online games.
    • Impose penalties and issue directions.
    • Cancel registration if a game changes its model to involve betting or wagering.
• Scope of the Act: It includes all forms of online money games e.g., poker, fantasy sports, betting.
  • It allows only “online social games” and e-sports — games meant for recreation, education, or skill development.
• Registration: Both e-sports and social games will require compulsory registration with the authority. A certificate of registration will be valid for up to five years.
• Regulation: Companies must register their games with the Authority.
  • They must provide details of revenue model and user safety features.
  • Proof that revenue comes from ads, subscriptions, or access fees — not from wagers or stakes.
• Penalties and Offences: Offering online money gaming services may attract up to three years’ imprisonment and fines of up to ₹1 crore.
  • Advertising such platforms could lead to two years’ imprisonment and fines up to ₹50 lakh.
  • Violations are non-bailable offences and entire company staff can be held liable for facilitating breaches.
• Penalty Depends on: The gain from violation, loss to users and repetition of offence.
• Grievance Redressal Mechanism (Three-tiered): Internal mechanism of the game company.
  • Grievance Appellate Committee (GAC) — under IT Rules, 2021.
  • Online Gaming Authority of India — final appeal.
• The Role of Various Authorities: E-sports will fall under the Ministry of Youth Affairs, while social games will be regulated by the Ministry of Information & Broadcasting.
  • MeitY will hold overall regulatory responsibility.
  • The Ministry of Information & Broadcasting (I&B) will issue codes of practice and guidelines for classifying online social games (recreational, educational, skill-based, etc.).

Significance

• It will establish a uniform and national-level legal framework in the public interest.
• It will protect the country’s youth from predatory online Real Money Gaming apps which manipulate them through misleading monetary return promises.
• It seeks to curb gambling, addiction, and financial risks, while promoting ethical, skill-based gaming.