BW Gaming World
Imagine a world where players can transcend into reality, forging new adventures in the vast landscapes of online gaming. In this rapidly evolving digital frontier, governments across the world are grappling with the formidable challenge of finding ways to regulate an industry that has grown from a niche hobby into a global phenomenon. The latest chapter in this saga sees the Ministry of Electronics and Information Technology (MeitY) making an unprecedented and enabling move, one that could redefine the future of online gaming as we know it.
Online gaming in India has seen remarkable growth, evolving from simple single-player games in the early 1990s into a thriving multi-billion-dollar industry in 2022. It’s being regarded as a promising sector by policymakers, venture capitalists and the startup community in India. The Animation, Visual Effects, Gaming and Comic (AVGC) sector is also being viewed as the new frontier for growth, innovation and job creation in India and is believed to capture 5 per cent (around USD 40 billion) of the global market share by the year 2025, with an annual growth of around 25 to 30 per cent and creating over 1,60,000 new jobs annually1. This gaming industry revolution in India is being driven by factors such as the widespread availability of low-cost smartphones, one of the world’s lowest data tariffs, high-speed internet access and increased disposable incomes.
One of the rapidly growing sub-categories of online games is ‘real-money games’ (RMGs), where players typically contribute money and compete to win cash prizes based on knowledge and skill of real sporting event outcomes. RMGs are rapidly expanding within the Indian gaming landscape, accounting for a significant percentage of the total gaming sector revenue, thus establishing significant interest from players, gaming platforms and the government.
Nonetheless, alongside these technological progressions, there has been a simultaneous increase in legal and regulatory intricacies. Traditionally, online gaming platforms functioned within the parameters of the Information Technology Act of 2000, falling under the jurisdiction of the MeitY. The regulatory landscape shifted significantly due to the enactment of the Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Amendment Rules, 2023, commonly referred to as the Gaming Rules, 2023.
One of the most notable aspects of this amendment is the government’s decision to permit the establishment of self-regulatory bodies (SRBs) and grant them significant authority to regulate
online gaming intermediaries (OGIs) – Nomenclature of platforms offering any form of online games.
The fruition of such a trusting and empowering regulatory framework relies entirely on the swift implementation of the SRBs. The Gaming Rules, 2023, outline the necessity for at least three SRBs to gain MeitY’s approval and alignment with these rules to ensure effective oversight of the OGIs.
Host of benefits expected from the formation of SRBs for the online gaming ecosystem:
- SRBs in the gaming industry are expected to foster growth and innovation in several measures.
- SRBs are expected to significantly enhance stakeholder confidence by promoting ethical practices in the industry and providing a stable and predictable regulatory environment.
- They can catalyse competitiveness in the sector through indigenous research and development, resulting in rapid product innovation while significantly contributing towards projecting India as a global innovation hub.
- They are expected to boost user/player confidence by ensuring expeditious resolution of grievances and adoption of standard operating practices, ensuring adherence to global standards.
- In the longer term, the sector’s overall contribution to India’s overall gross domestic product (GDP) growth will be enhanced, employment opportunities will be created, and ultimately, it will have a multiplier impact where benefits accrued are reinvested into the economy.
However, it is of paramount importance that MeitY makes a decision on the SRB applications. The gaming industry, in its current stage of development, is in urgent need of regulatory assurance and supervision, a demand that the SRBs can readily meet. SRBs have demonstrated remarkable success in guiding progress and innovation in various other sectors across India. All stakeholders within the gaming industry are optimistic that this success will likewise be mirrored in the gaming industry.
Written by Dharmender Jhamb, Partner, Business Consulting, Grant Thornton Bharat & Arindam Das, Director, Business Consulting, Grant Thornton Bharat
