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Government calls for self-regulation mechanism, mandatory verification for online gambling companies

The government has proposed a self-regulatory mechanism, mandatory player verification and Indian physical address for online gaming companies, as per the online gaming draft rules published on Monday. Online gaming companies are subject to the new IT rules issued in 2021 for social media platforms.

The online gambling platforms are expected to abide by the laws of the country, including laws pertaining to gambling or betting or the age at which a person is competent to enter into a contract.

“The draft amendments are intended to address the stated need while enabling the growth of the online gaming industry in a responsible manner,” the statement said.

The draft amendments provide that an online gambling intermediary will conduct due diligence required by the rules, “including making reasonable efforts to ensure that its users do not host, display, upload, publish, transmit or share any online game that does not comply with Indian law, including any law on gambling or betting”.

According to the minister, online gambling companies are not allowed to bet on the outcome of games according to the principle laid down in draft rules. From now on, all permitted online gaming must be registered with a self-regulatory organization responsible for online gaming rules, he added.

“Under the principles laid down under the rule, betting on the outcome of the game is not allowed. All online gambling companies will have to register with the self-regulatory body which will decide on the action to be taken under the rules,” said the minister.

The draft rules mandate additional due diligence for companies by displaying a registration mark on all online games registered by a self-regulatory body and informing its users of its policies regarding deposit withdrawal or refund, method of determination and distribution of winnings , fees and other charges to be paid and KYC procedure for user account registration.

“Self-regulatory bodies will be registered with the Ministry (Ministry of Electronics and Information Technology) and can register online games from such online gaming intermediaries who are members and meet certain criteria. Such bodies will also resolve complaints through a grievance mechanism.”, said the message.

The Ministry of Electronics and IT has invited public comments on the draft rule for January 17.

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