Skip to main content

The Online Gaming Intermediaries Regulations: Future Road Ahead

 

On April 6th, 2023, a new regulations for Online Gaming was ben introduced under section 87 of the Information Technology Act, 2000 ( hereinafter referred to as the “IT Act”)  by Ministry of Electronics and Information Technology ( hereinafter referred to as the “MeITY”) via amendment of The Informational Technology, 2021 (Intermediary Guidelines and Digital Media Ethics Code) (hereinafter  referred to as the “Online Gaming Regulations” ), which has significant impact on Online Gaming in India. This Gaming Regulations is a welcome step to clarify uncertainties and to reign certain activities such as betting and gambling which have plagued the online gaming sector. The online gaming sector is in its nascent stage in India and to curve its growth on innovative track, there are few additional checks and balances have been imposed via Online Gaming Regulations which includes but not limited to the introduction of Self-Regulatory Body (hereinafter referred to as the “SRB”) to ensure compliance under Online Gaming Regulations and to keep the Online Gaming companies under checks and balances.

In this article we have analysed the impact of Online Gaming Regulations on the gaming companies and the sector itself.

Before moving further, few important definitions are listed out below for a better understanding:

a.     Online Game: - means a game that is offered on the Internet and is accessible by a user through a computer resource or intermediary.

b.     Online Gaming Intermediary: - means any intermediary that enable the users of its computer resources to access one or more online games.

c.      Online Real Money Game: - means on an online game where a user makes a deposit in cash or kind with the expectation of earning winnings on that deposit.

d.     Permissible Online Game: - means a permissible online real money game or any other online game that is not an online real money game.

e.     Permissible Online Real Money Game: - means an online real money game verified by an online gaming self-regulatory body.

The most significant and welcome change in Online Gaming Industry though the Online Gaming Regulations is introduction of Self-Regulatory Bodies or SRBs.

Self-Regulatory Bodies / SRBs: - To be approved by MeITY for verification and permission of the online real money games who shall be incorporated as Section 8 company under the Companies Act, 2013. Prior to grant permission, SRB need to satisfy itself that such online real money game does not involve wagering on any outcome.

The obligations to the Online gaming Companies shall not come into force until the expiry period of 3 months from the date on which at least three online gaming SRBs have been designated by MeITY.

Online Gaming Intermediaries: - They need to carry out their obligations under Online Gaming Regulations with diligence while discharging its duties.

Any permissible online real money game shall display a demonstrable and visible mark of verification of such online game by SRBs.

An online gaming intermediary shall account for  the following:

a.     The rules and regulations for the said online game, privacy policy, terms of services and user agreement along with policy related to withdrawal or refund of the deposit made with the expectation of earning winnings, the manner of determination and distribution of such winnings, and the fees and other charges payable by the user;

b.     To verify the KYC of user for identification of such user before accepting any deposit in cash or kind from any user for permissible online real money game;

c.      The measures taken for protection of deposit made a user for such online game;

d.     Shall not itself finance by way of credit or enable financing to be offered by third party for the purpose of playing permissible online real money game by users;

e.     To publish and maintain on its website, mobile based application or both, at all times, an updated list of all permissible online real money games verified by SRBs along with details of such online games including the details of applicant, the dates and period of validity of the verification, the reasons of such verification and the details of the suspension or revocation, if any.

Viewpoint: - The Online Gaming regulations is a welcome step to bring clarity and having one single regulation instead of having several state regulations over online game. In coming days, the compliances w.r.t. online gaming intermediaries are expected to have more clarity w.r.t. KYC of users, approval of permissible online real money games, and clarification over kind as deposit in online real money game etc.

This article is for information purpose only and should not be taken as legal advice.

To know further details, clarification, assistance or any advice on Online Gaming regulations, its compliance, refund or acceptance of cash from the users, settlement of grievances with the users over money or any legal issues on online/fantasy games, you may connect with us at admin@equicorplegal.com / 08448824659 and visit www.equicorplegal.com .

Labels:

Comments

Post a Comment

Popular posts from this blog

PSARA License: To Start a Private Security Agency Business in India

Private Security Agency business is one of the most sought and rapid growing business in India with huge demand and potential. Due to ever evolving demand for private security by industry & business segments, the Private Security Agency business is growing for more than 20% and there is still huge untapped market still wide open for the future ventures. Today in any and every aspect, private security has an important role to play, whether its transfer of cash to ATM, transportation of valuables or protection to key members of business conglomerates. Any Private Security Agency cannot commence its business and operations in India without procurement of license under Private Security Agencies (Regulation) Act, 2005 also known as PSARA License . PSARA License is obtained state wise & is valid for 5 years and had to be renewed after every 5 years. The government fees for PSARA License is as following: 1.        For one (1) District- Rs. 5,000/- 2.        For more th
Post a Comment
Read more

Non-Banking Financial Companies (NBFC)

A Non-Banking Financial Company (NBFC) is a  company registered under the Companies Act, 1956 and is engaged in the business of loans and advances, acquisition of shares stock/bonds/debentures/securities issued by Government or local authority or other securities of like marketable nature, leasing, hire-purchase, insurance business, chit business but does not include any institution whose principal business is that of agriculture activity, industrial activity, sale/purchase/construction of immovable property. A non-banking institution which is a company and which has its principal business of receiving deposits under any scheme or arrangement or any other manner, or lending in any manner is also a non-banking financial company (Residuary non-banking company). Advantages of NBFC a)       it can provide loans and credit facilities, b)       it can trade in  money market instruments c)       it can do wealth management such as Managing portfolios of stocks and shares d)     
8 comments
Read more

Investment Frauds by Investment Advisers

Today driven by the promise of higher returns than the saving accounts or fixed deposits, most of the small and retail investors are moving their investments under the guidance of Investment Advisers. “ Investment Advisers ” means any person, who for consideration, is engaged in the business of providing investment advice to clients or other persons or group of persons and includes any person who holds out himself as an investment adviser, by whatever name called. Investment Advisers who make public appearance or make recommendations or offer an opinion concerning securities or public offers through public media while making recommendations through public media are required to comply with the relevant applicable laws. What is an Investment Advice: - “ Investment Advice”  is an advice relating to investing in, purchasing, selling or otherwise dealing in securities or investment products, and advice on investment portfolio containing securities or investment products, whether
Post a Comment
Read more

NCLT has Exclusive Jurisdiction for all the Company Matters

In deciding an appeal in the matter of MAIF Investment India PTE Ltd. v/s Ind-Barath Power Infra Limited & Ors ., Company Appeal (AT) No. 334 of 2018, NCLAT has reviewed and decided on the issue of exclusive jurisdiction of NCLT in all the company matters and to bar the jurisdiction of civil courts including   complex and contentious one. The appeal was against the order given by NCLT, Hyderabad, where the NCLT, Hyderabad bench declined to entertain the petition under Section 59 of the Companies Act, 2013 for seeking a rectification in the register of members. The alleged dispute involved conversion of compulsory convertible debentures without requisite consent and quorum. NCLT, Hyderabad dismissed the petition stating the reason that issue raised were complex or contentious issue which required the examination of the Arbitration Act, 1996 & Insolvency & Bankruptcy Code, 2016. While dismissing the petition, NCLT, Hyderabad had relied on Supreme Court’s 1998 judge
Post a Comment
Read more

Types of Companies under New Companies Act-2013

With new testament of Corporate law in force has introduced several different types of companies with special features. ONE PERSON COMPANY (OPC) One Person Company is defined in Sub- Section 62 of Section 2 of The Companies Act, 2013, which reads as follows: 'One Person Company means a company which has only one member' It shall also be important to note that Section 3 classifies OPC as a Private Company for all the legal purposes with only one member. All the provisions related to the private company are applicable to an OPC, unless otherwise expressly excluded. Ø   Only a natural person who is an Indian citizen and resident in India- ü   shall be eligible to incorporate a One Person Company; ü   shall be a nominee for the sole member of a One Person Company. Ø   No person shall be eligible to incorporate more than a One Person Company or become nominee in more than one such company. Ø   No minor shall become member or nominee of the One Person Company
4 comments
Read more

Legal Obligations of Technology Service Providers as Intermediaries

A database of millions of customers including their contact details are found freely accessible online and are available for sale at a very nominal price at various online social media platforms has brought a serious and basic question in focus- who all can be held responsible and accountable for such unauthorize and illegal acts? Prima facie , the person who is selling the database is responsible under the eyes of law, but do the technology services providers or the platform where such database is been listed, owes any obligation to the customers and can be held responsible for unauthorize acts by a third party on their platform? The technology service providers or the online platform operators are commonly known as “ Intermediaries ”. In India, these technology service providers or Intermediaries are governed by the provisions of Information Technology Act, 2000 (“ IT Act ”) along with Information Technology (Intermediaries Guidelines) Rules, 2011 (“ Intermediary Rules ”)
Post a Comment
Read more

Nidhi Companies in India

This article enumerates the brief transaction procedure involved in the establishment of a Nidhi Company and the laws relating to Nidhi Company in force in India. It shall be noted that the activities described hereunder covers various relevant legislations, regulations and rules, for the time being in force in India and the legal entity has to obtain approval/register itself with Ministry of Corporate Affairs (“ MCA ”). Preface In the Indian financial sector, Nidhi Company refers to any mutual benefit society notified by the MCA. They are created mainly for cultivating the habit of thrift and savings amongst its members. The amount of business conducted by Nidhi Companies is not as big as commercial banks or deposit taking Non-Banking Finance Companies. Nidhi Companies are highly localized and mostly single office institutions. They are also referred to as mutual benefit societies, because they accept deposits and give loans to only their own members; and membership is limited
4 comments
Read more