MEITY proposes amendments to IT (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021 to include provisions relating to online gaming; public comments invited by 17th January, 2023
The Ministry of Electronics and Information Technology (“Meity”) has proposed amendments to the IT (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021 (“Principal Rules’) to include provisions relating to online gaming.
Meity has invited feedback from the public on the website of MyGov (https://innovateindia.mygov.in/onlinegaming-rules/ ) by 17th January, 2023.
“Online game” is proposed to be defined as a game that is offered on the Internet and is accessible by a user through a computer resource if he makes a deposit with the expectation of earning winnings. Further, the proposed amendments also defines “online gaming intermediary” as an intermediary that offers one or more than one online game.
Background:
With the user base of online games growing in India, need has been felt to ensure that such games be offered in conformity with Indian laws and that the users of such games be safeguarded against potential harm. Further, with a view to enable consideration of issues related to online gaming in their totality, Government of India has allocated matters related to online gaming to the Ministry of Electronics and Information Technology.
Against this backdrop, after taking into account inputs received from various Ministries/Departments concerned as well as other stakeholders, Meity has prepared draft amendments to the Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021 which aim at addressing the said need, while enabling the growth of the online gaming industry in a responsible manner.
The draft amendment defines “online game” as well as “online gaming intermediary”. The draft amendments envisage that an online gaming intermediary has observed due diligence required under the rules while discharging its duties, including reasonable efforts to cause its users not to host, display, upload, publish, transmit or share an online game not in conformity with Indian law, including any law on gambling or betting. Moreover, online gaming intermediaries have to observe additional due diligence by displaying a registration mark on all online games registered by a self-regulatory body and informing its users regarding its policy related to withdrawal or refund of deposit, manner of determination and distribution of winnings, fees and other charges payable and KYC procedure for user account registration.
Key Takeaways on proposed additional due diligence to be observed by online gaming intermediary:
1. In addition to the existing due diligence requirements prescribed under *Rule 3 and **Rule 4, an online gaming intermediary (offering online games) is required to observe the following additional due diligence while discharging its duties, namely:
a. display a demonstrable and visible mark of registration on all online games (registered by a self-regulatory body);
b. the rules and regulations, privacy policy, terms of service and user agreements of the online gaming intermediary needs to be drafted in a manner to inform the user of its computer resource of:
• all the online games offered by the online gaming intermediary, along with the 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 for each such online game;
• the risk of financial loss and addiction associated with the online game;
• the know-your-customer procedure followed by the online gaming intermediary for registration of the account of a user;
• the measures taken for protection of deposit made by a user.
2. online gaming intermediary needs to prominently publish (on its website, mobile based application or both) a random number generation certificate and a no bot certificate from a reputed certifying body for each online game offered by it, along with relevant details of the same;
3. at the time of commencement of a user-account based relationship for an online game, the online gaming intermediary needs to identify the user and verify his/ her identity;
Note: The procedure for identification and verification shall, mutatis mutandis, be the procedure required to be followed by an entity regulated by the Reserve Bank of India under directions issued by it for identification and verification of a customer at the commencement of an account-based relationship.
4. the online gaming intermediary has to enable users who register for their services from India, or use their services in India, to voluntarily verify their accounts by using any appropriate mechanism, including the active Indian mobile number of such users, and where any user voluntarily verifies their account, such user shall be provided with a demonstrable and visible mark of verification, which shall be visible to all users of the service;
5. The draft further proposes the compliance obligation of an online gaming intermediary to appoint a Chief Compliance Officer, who will be a key managerial personnel or such other senior employee of the online gaming intermediary who is resident in India, and who will be responsible for ensuring compliance with the Act and the rules and will be liable in any proceedings relating to any relevant third-party information or data or communication link made available or hosted by the online gaming intermediary. Such Chief Compliance Officer has to also ensure coordination at all times with law enforcement agencies and their officers to ensure compliance with their orders or requisitions made in accordance with any law for the time being in force;
6. the online gaming intermediary should also have a physical contact address in India published on its website or mobile based application, or both, for the purposes of receiving any communication addressed to it.
A copy of the draft amendments is linked below for ease of reference.
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*Rule 3 of IT (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021 lays down ‘’ Due diligence by an intermediary”
**Rule 4 of IT (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021 lays down “Additional due diligence to be observed by significant social media intermediary”
