Editorial | Gaming rules: Cautious optimism

The notification of rules to operationalise the Promotion of Regulation of Online Gaming Act has brought much-needed finality, especially regarding the banning of all online real-money games.

Prior to the Act, a distinction was made between games of skill and games of chance, with the latter treated as gambling. Under the 2025 law, there is a blanket ban on online games involving real money. This was necessitated by reports of crores of people losing vast sums in online gaming.

The government, which has been following a highly restrictive approach to online and digital regulation, has surprisingly opted for a “regulation-light” framework for this burgeoning sunrise sector. This is possibly due to the government’s pro-business and ease-of-doing-business proclivities, with its coercive, arm-twisting approach being limited to information dissemination and freedom of expression. Be that as it may, this refreshing approach needs to be welcomed, and one expects the government to follow it in other important domains as well.

Since mandatory registration is not required, this will give the necessary impetus to the sector, leading to a proliferation of online games. Along the way, the government will regulate, if necessary, based on the nature, volume, or value of financial transactions or authorisation of funds that a gaming platform stipulates. On the face of it, this seems a good approach, but one needs to be sceptical given the mindset of Indian entrepreneurs and business firms that might zealously exploit every single loophole, or a bureaucracy with flexible ethics using its discretion to interpret rules in favour of or against specific platforms.

The authorities seem to have taken cognisance of and responded to the financial losses incurred by naïve and gullible people who fell for the dirty tricks of unscrupulous platforms. Service providers are expected to have inbuilt “user safety features” such as age verification, age-gating (a digital safety mechanism that restricts access based on a user’s age), and parental controls, which will protect children and young adults from the dangers posed by rapacious and predatory platforms. Since digital devices and applications are designed to be addictive, including features like time restrictions could have limited efficacy. It is difficult to believe that many platforms focused on profit maximisation would voluntarily practise fair play and safe, transparent, and ethical commerce. Secondly, the regulations make it mandatory for gaming platforms to establish and maintain a functional grievance redressal mechanism with scope for escalation and appeal.

Much will therefore depend on the Online Gaming Authority of India, a multi-sectoral body to be constituted under the Ministry of Electronics and Information Technology. Going by the track record of other similar regulating authorities, the results are likely to be mixed and would depend on several factors, including powerful lobbying by the industry, the broad political drift, and consumer advocacy.

Besides protecting children and adult users from gambling and other addictive behaviours, a major challenge will be the prevention of misuse of this difficult-to-monitor ecosystem for money laundering, tax evasion, and other nefarious activities. The Mahadev betting app scandal is a case in point. There have been other cases involving suspicious foreign nationals or entities, dubious hawala networks, and fraudulent or benami transactions. The government should enable the growth of legitimate business, which offers employment to lakhs of people, but should not dilly-dally when it comes to curbing activities inimical to public interest.