Blog

The government is reportedly working on developing a national framework for online gaming platforms to effectively regulate them without slowing down their growth.

According to an ET report, the Ministry of Electronics and Information Technology (MeitY) held a meeting with 40 online gaming platforms, including gaming unicorns such as Mobile Premier League (MPL), Dream11 and Nazara Technologies, among others.

Representatives from the trade bodies such as the All India Gaming Federation were also present in the meeting, which was presided over by the Minister of State for Information Technology Rajeev Chandrasekhar.

“The idea is to support and facilitate the growth and expansion of all gaming platforms while also effectively regulating them. However, the regulations should not impede their growth,” a senior government official said.

The industry has been calling for a ‘code’ for online gaming platforms for the last few months. In December 2021, online gaming platforms had written to MeitY for the same.

Another official told ET that one of the major concerns raised in the meeting was the debate on skill versus chance since there are no uniform regulations or regulatory bodies which could decide the same. 

Along the same lines, the Rajasthan government’s draft Rajasthan Virtual Online Sports (Regulation) Bill 2022 was also discussed at the meeting, along with other state governments’ legislations and drafts for the same.

The state’s government drafted the legislation to regulate online gaming. However, it has not made a distinction between esports and fantasy gaming, which can be detrimental to both segments within the larger gaming industry.

To that extent, the industry called for a central regulatory framework that would be ‘stable and predictable’ so that there are no sudden shocks to the industry. The industry has also called for amendments in the Gambling Act so that there is a clear interpretation of the law for online gaming.

Recently, the government has started working towards regulating the country’s $1.54 Bn online gaming industry in 2022, per a Statista report. The industry, which is slated to grow at a CAGR of 15% to reach $2 Bn by 2024, has seen a lot of interest from the government, from a taxation perspective.

The government recently put together a Group of Ministers (GoM) for imposing 28% GST on the online gaming industry. The panel, led by Meghalaya CM Conrad Sangma, finalised its report in mid-May 2022 and will present the same at the next GST Council meeting.

The panel has also agreed that the GST will be levied on gross gaming revenue and not on a per-transaction basis, or on every betting amount. By all accounts, this is a move to discourage gambling and betting within the country.