On 6 April 2023, the Indian Ministry of Electronics and Information Technology (MeitY) notified the Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Amendment Rules, 2023 (Amendment Rules), primarily for online real money games, to amend the Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021 (IT Rules).
Per the Amendment Rules, certain new definitions have been added such as:
- “online game‟ means a game that is offered on the internet and is accessible by a user through a computer resource or an intermediary;
- “online gaming intermediary‟ means any intermediary that enables the users of its computer resource to access one or more online games;
- “online gaming self-regulatory body‟ (SRB) means an entity designated as such under rule 4A;
- “online real money game‟ means an online game where a user makes a deposit in cash or kind with the expectation of earning winnings on that deposit;
- “permissible online game‟ means a permissible online real money game or any other online game that is not an online real money game;
- “permissible online real money game‟ means an online real money game verified by an SRB under rule 4A.
The Amendment Rules have included an online gaming intermediary along with “a social media intermediary and significant social media intermediary” in Rule 3, thereby increasing the number of intermediaries covered by the IT Rules.
The Amendment Rules place an obligation on intermediaries not to host, display, upload, modify, publish, transmit, store, update or share any information which:
- is an online game that causes user harm;
- is in the nature of an online game that is not verified as a permissible online game;
- is in the nature of an advertisement or surrogate advertisement or promotion of an online game that is not a permissible online game, or of any online gaming intermediary offering such an online game.
New sub-rules have been added to Rule 4 along with certain other amendments pertaining to ‘Additional due diligence to be observed by significant social media intermediary’, which require that online gaming intermediaries which enables access to its users to any permissible online real money games will need to display a demonstrable and visible mark of verification of such online real money game by an SRB.
Further, in Rule 4, an online gaming intermediary that enables the users to access any permissible online real money game, need to include the following information in respect of every such online real money game, namely:
- 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;
- know-your-customer procedure followed by it for verifying the identity of the users of such online game; and
- the measures taken for protection of deposits made by a user for such online game.
An online gaming intermediary that enables users to access any permissible online real money game cannot itself finance by way of credit or enable financing to be offered by any third party for playing such online game.
Rule 4A has been inserted under the Amendment Rules with respect to ‘Verification of online real money game’ providing that:
- the MeitY may designate as many SRBs as it may deem fit for the purposes of verifying an online real money game as a permissible online real money game under the Amendment Rules;
- the SRB would conduct an inquiry as it deems fit, upon any application being made by an online gaming intermediary and would satisfy itself that (i) the online real money game does not involve wagering on any outcome; and (ii) the online gaming intermediary and such online game is in compliance with the provisions of any law relating to the age at which an individual is competent to enter into a contract;
- the SRB, on their websites or mobile based application(s) or both, have to maintain along with other information, an updated list of all verified permissible online real money games; and
- every SRB will prominently publish on its website or mobile based application or both, the framework for redressal of grievances and the contact details of the Grievance Officer.
Further, Rule 4C, which provides for ‘Obligations in relation to online game other than online real money game’ as inserted by the Amendment Rules, states that in the interest of the sovereignty, integrity or security of India or friendly relations with foreign States or public order, or preventing user harm, the Central Government may direct an online gaming intermediary to observe several obligations which are applicable to a permissible online real money game.
The Amendment Rules as notified by MeitY, can be accessed through the following link: