According to recent media reports, the Union Ministry of Electronics and Information Technology (MeitY) is likely to agree to urges by industry to adopt a graded approach to KYC (know your customer) norms for online gaming with real money and lessen the requirements for small deposit amounts of less than Rs 10,000.
In late December, 2022 MeitY was appointed as the nodal ministry for matters related to online gaming, and in January this year, the Ministry published on its site ‘Draft Amendments to the IT (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021’ proposing regulations for the sector.
The draft amendments envision an obligation for online gaming intermediaries to verify the identity of all customers when they register a new account for playing games.
However, such full KYC obligations bring heavy technical requirements to operators including developing capabilities to identify customers via a video-based process.
This is why the industry requested a relief in the KYC norms and suggested MeitY to follow the master directions for small prepaid payment instruments (PPIs) of the Reserve Bank of India (RBI). This would allow for a simpler registration process for deposits smaller than Rs 10,000 including a mobile number, verified by a one-time password (OTP), the number of any government-issued identification document, and a name.
Sources from the IT Ministry have pointed out that MeitY does not want to create stricter requirements than the RBI’s, and that the Ministry is likely to accept the suggestion of the gaming companies.
Regulating Online Gaming has at Least Five Major Benefits
India is already polishing the details of what is going to be its first national-level regulation on online gaming. The obvious reason motivating the efforts of the Union Government to push for regulation is to protect the public from the risks associated with online gaming.
Player safety is of course the most crucial benefit, but there are at least five other major reasons to regulate online gaming that have undoubtedly also been taken into consideration by the country’s top bureaucrats.
Quality Assurance
Gaming products of inferior quality, including deceitfully advertised games, will have much harder time getting to the market as they will need to get approval first.
Proper online gaming regulations in this way can make sure players have access only to games of sound quality and know what they are getting for their money.
Increased Revenues for the Budget
Instead of having Indian gamer money going into the hands of black marketeers or being syphoned out of the country by offshore-based gaming platforms, a regulated online gaming landscape will keep the money flows in India, legalise them and make them taxable.
The increased revenues from taxes and licensing fees will not just benefit the budget, as the extra proceeds can be used to fund various social and welfare activities, including player safety, responsible gaming awareness and mental health protection programs.
Change of Perspective
Gaming and its online counterpart are still subject to a lot of negative perceptions in society, and this can make it difficult for some people to integrate or even lead to detrimental feelings of ostracism.
Regulation will enhance the integrity of gaming platforms and will gradually change the way people perceive online gaming. This will not only make it easier to receive help for people that need it, but will also open the gates for young and aspiring players who want to pursue a professional career in gaming.
Job Creation
Winning tournament trophies and prize pools is only one of the ways to make money from online games. This expanding industry is constantly on the lookout for fresh talent and creating jobs by the hour.
The direct employment generated by the sector is just the tip of the iceberg, as numerous side businesses and whole industries support and thrive alongside the gaming industry, from small joints that cater food and coffee to the coders to large semiconductor manufacturers.
Data Protection
As we take more and more parts of our lives to the internet, we gradually become aware of how important it is to have one’s personal, financial and other data well protected.
Governments have already banned games due to data safety considerations, but a robust regulatory framework would be able to set solid standards in this regard and make such post factum bans unnecessary.
As a whole, gaming regulation would promote the good players on the market and discourage “entrepreneurs” with hit-and-run intentions and fraudsters, creating a healthier field for all stakeholders.
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