Moots government self-regulatory mechanism, mandatory verification for online gambling companies

The government has proposed a self-regulatory mechanism, mandatory Indian player and physical address verification for online gambling companies, according to draft online gambling rules released on Monday. Online gaming companies will be covered by new IT rules released in 2021 for social media platforms.

Online gambling platforms are expected to follow the laws of the country, including any laws relating to gambling or betting or the age at which a person is fit to enter into a contract.

“The proposed amendments are intended to address this need while allowing the growth of the online gaming industry in a responsible manner,” the notice states.

The draft amendments provide that an online gaming intermediary will observe due diligence required under the rules, “including reasonable efforts to prevent its users from hosting, posting, uploading, publishing, transmitting or to share an online game that does not comply with Indian law, including any gambling or betting law”.

Online gambling companies will not be allowed to bet on the outcome of games under the principle set out in the draft rules, the minister said. From now on, all authorized online games will have to be registered with a self-regulatory body which will be responsible for the rules of online games, he added.

“In accordance with the principles set out in the rule, betting on the outcome of the game will not be allowed. All online gambling companies will have to register with the self-regulatory body which will decide what action to take in accordance with the rules, “said the minister.

The draft rules prescribe additional due diligence for companies by displaying a registration mark on all online games registered by a self-regulatory organization and informing its users of its policy for withdrawing or refunding the deposit, the method of determining and distributing winnings, fees and other charges to be paid and KYC procedure for registering the user account.

“The self-regulatory bodies will be registered with the Ministry (Ministry of Electronics and Information Technology) and may register the online games of those online gambling intermediaries who are members of them and meet certain criteria. These bodies will also resolve complaints through a grievance mechanism,” the notice reads.

The Ministry of Electronics and Computing invited the public to comment on the draft rule by January 17.

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