The Central Government has introduced new rules to regulate online gaming by amending the Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021. The amendment includes the addition of definitions for key terms such as 'online gaming intermediary', 'online gaming self-regulatory body', 'online real money game', 'permissible online game', and 'permissible online real money game'. These definitions clarify the scope of online gaming and its regulation. Specifically, an online game is defined as one that is accessible to users through the internet and a computer resource or intermediary. This move is made under the powers granted to the government by Sections 87(1), 87(2)(z), and 87(2)(zg) of the Information Technology Act.
The Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Amendment Rules, 2023 have introduced a new set of requirements for online gaming intermediaries. According to Rule 3(1), intermediaries are now mandated to adhere to due diligence requirements. The revised due diligence requirements impose additional obligations on intermediaries, such as the obligation to inform users about their rules and regulations, privacy policies, and user agreements. Moreover, intermediaries are barred from hosting, displaying, uploading, modifying, publishing, transmitting, storing, updating, or sharing any information that falls under the following categories [Rule 3(1)(b)]:
Relates to or encourages online games that may cause harm to users [Rule 3(1)(b)(ii)]. Is an online game that has not been verified as a permissible online game [Rule 3(1)(b)(ix)]. Online gaming intermediaries are now required to comply with revised due diligence requirements under the Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Amendment Rules, 2023. Rule 3(1)(b) prohibits intermediaries from hosting, displaying, uploading, modifying, publishing, transmitting, storing, updating, or sharing any information related to or encouraging online games that cause user harm or that have not been verified as permissible online games.
The latest amendment to the Rules has introduced Rule 4A which empowers the Central Government to designate multiple online gaming self-regulatory bodies to verify an online real money game as permissible under the Rules. The criteria for being designated as a self-regulatory body are outlined, and the Rules provide for suspension and revocation of designation.
In order for the online gaming self-regulatory body to declare an online real money game as permissible, it must verify that the game does not involve wagering on any outcome, and that the online gaming intermediary and the online game are in compliance with all other obligations, including due diligence obligations under the existing rules [Rule 4A].
For the first three months after designation, the self-regulatory body can initially rely on the information provided by the applicant for verification purposes and declare it as permissible. Within this period, the body must complete its inquiry and either declare the online game as permissible or inform the applicant in writing of the reasons why it does not meet the requirements under the Rules [Rule 4A].
Under the 2023 amendment, the due diligence obligations will apply only after three months from the date of designating at least three online gaming self-regulatory bodies [Rule 4B]. However, the Central Government has the power to direct an online game to comply with the due diligence obligations prior to the expiry of the three months. Furthermore, the Rules stipulate that certain obligations may also be imposed on online games other than online real money games [Rule 4C].
Additionally, Rule 3(1)(b)(x) now prohibits intermediaries from promoting or advertising online games that are not permissible, or any online gaming intermediary that offers such games. Intermediaries must also inform users of their rules and regulations, privacy policies, and user agreements at least once a year, and immediately inform users of any changes made.
If an intermediary enables users to access permissible online real money games, it must inform users of any changes made no later than 24 hours after the change takes effect. Furthermore, if the intermediary receives an order from a government agency authorized for investigative, protective, or cyber security activities, it must provide information or assistance within 24 hours of receiving the order. The order must be in writing and clearly state its purpose.
Under the Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Amendment Rules, 2023, the online gaming self-regulatory body must adhere to the orders passed by the Grievance Appellate Committee and publish a compliance report on its website [Rule 3(7)]. Additionally, the online gaming self-regulatory body must comply with further due diligence requirements outlined in Rule 4. This includes appointing a Chief Compliance Officer, nodal contact person, and resident grievance officer. The body must also publish periodic compliance reports detailing the complaints received and the action taken in response [Rule 4(1)].
Furthermore, a significant social media intermediary and any online gaming intermediary that enables users to access permissible online real money games must have a physical contact address in India published on their website, mobile application, or both [Rule 4(5)]. They must also establish a mechanism for receiving complaints and allow complainants to track the status of their complaints [Rule 4(6)]. Finally, a mechanism must be in place to enable Indian users to voluntarily verify their accounts, and verified accounts should be given a visible mark or verification [Rule 4(7)].
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TAGS: Intermediary Guidelines Digital Media Ethics Code online gaming due diligence self regulatory body real money game permissible verification compliance obligations.
