A- Responsible Gaming Standards

India

1) The Government of India ushers in new era of responsible online gaming through strict guidelines
for ensuring safety of Digital Nagriks and accountability of online gaming industry 1. While certain
state laws prohibit betting and gambling, the Supreme Court has ruled in a number of decisions that
some skill-based games are constitutionally permissible. The Indian online gambling market has
experienced tremendous growth in the last several years under this legal environment. But in the last
several years, a number of social and economic issues have surfaced from this business, in spite of the
current legal environment.

2) The Ministry of Electronics and IT (MeitY) has introduced various checks and balances through
relevant amendments to the Information Technology (Intermediary Guidelines and Digital Media
Ethics Code) Rules, 2021 notified on April 06, 2023 2. The purpose of these amendments is to control
the unabated and unwarranted negative impact of online gaming activities on users, especially
children and other vulnerable sections of society.

3) The Infocomm Media Development Authority (IMDA) plays a crucial role in this regulatory
landscape while collaborating with Ministry of Home Affairs to regulate content and ensure social
welfare of players.

Abroad

1) The Model from the UK Under the direction of the UK Gambling Commission (UKGC), the UK
has one of the most progressive online gambling regulation frameworks in the world. All operators
must provide their own self-exclusion choices and participate in the national online self-exclusion
program (GAMSTOP), according to UKGC's License Conditions and Codes of Practice. With just
one request, it allows users to self-exclude from any legally registered online gambling service in the
nation. This strategy really encourages responsible gaming behaviour while giving users the tools they
need to better control their gaming habits.

1
https://pib.gov.in/PressReleaseIframePage.aspx?PRID=1918383
2
Amendment available at https://www.meity.gov.in/writereaddata/files/244980- Gazette%20Notification%20for
%20IT%20Amendment%20Rules%2C%202023-%20relating%20to%20online%20gaming%20%26%20false
%20information%20about%20Govt.%20business.pdf
2) Malta’s Licensing and Compliance standards The Malta Gaming Authority (MGA) is known for its
comprehensive licensing process, including rigorous compliance checks, and emphasis on player
safety and fairness. MGA’s process includes exhaustive background checks of gaming companies,
fairness of the games, and the security of online transactions. Companies must also demonstrate their
commitment to responsible gaming practices.

B- Consumer Protection Standards

India

1) Operating under the Ministry of Consumer Affairs, the Central Consumer Protection Authority
(CCPA) has issued a strong advice outlawing the promotion, advertising, and encouragement of such
illicit activities, including gambling and betting under false pretences of gaming.

2) The Consumer Protection Act of 2019 (CCPA) forbids the endorsement of illegal activities,
including gaming and betting. The Public Gambling Act of 1867 forbids these unlawful practices, but
an alarming increase in ads endorsing them has prompted this action.

3) Any user of an online gaming application may fall under the scope of a 'consumer' as per the
Consumer Protection Act of 2019 if such user avails of any service for a consideration and shall
include any beneficiary availing the service with the approval of the first user. Any aggrieved
consumer may file a complaint with Consumer Disputes Redressal Commissions (CDRC) that have
been set up at the district, state and national levels.

4) If the service provider is providing inadequate services, a complaint can be made. Any flaw, defect,
weakness, or insufficiency in the calibre, character, or style of the services' performance may be
considered a deficit. The idea of deficiency in services is arbitrary as there are no set standards by
which it must be determined. The facts of each case will be taken into account by the courts before
reaching this decision.

5) If the value of services provided is less than one crore rupees, then the complaint is to be filed
before the District CDRC. Complaints against online gaming service providers would generally fall
under the jurisdiction of the District CDRC. Appeals from a District CDRC shall be heard by the State
CDRC and then by the National CDRC. A final appeal may be sought before the Supreme Court.

Abroad
1) The Consumer Rights Directive (2011/83/EU)3 applies to online gambling and outlines
requirements for clear information, transparency, and the right to withdraw.

2) European Parliament’s motion on consumer protection in online video games4-

(2.1) It believes that consumer protection could be further improved and invites the
Commission to consider consumer protection issues in online video games as part of its
ongoing fitness check on EU consumer law to ensure equal fairness online and offline.
Consumer protection is essential to ensure a safe and trustworthy online environment for
video games and gamers, and building confidence among consumers can boost the economic
growth of the video game industry.
(2.2) Notes the Commission's notice from December 29, 2021, on unfair business-to-
consumer commercial practices in the single market, which offers guidance on applying EU
consumer law to in-game promotions and advertising, including to minors, in-game
purchases, and the presence of paid random content. Acknowledges that the EU consumer law
acquis offers robust consumer protection, which is fully applicable to video games; notes the
necessity of a consistent and coordinated approach between Member States and consumer
protection authorities, though, in order to prevent the single market from becoming
fragmented and to protect European consumers.
(2.3) calls for the complete respect and enforcement of European consumer legislation in the
video game industry, from the Commission and national consumer protection agencies
participating in the Consumer Protection Cooperation Network. It also notes the existence of
online video game platforms that let users, especially kids and minors, make their own games
using the developer's owned and provided tools; requests that the Commission enact
regulatory measures as needed to safeguard users—especially kids and minors—from any
unlawful activity that these platforms may be involved in; applauds the enhancement of
consumer protection that Directive (EU) 2019/770 will bring forth for video games, including
free-to-play titles, starting in January 2022.

European Parliament’s motion summary

a. Bolstering consumer protection in online video games

3
https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=celex%3A32011L0083
4
https://www.europarl.europa.eu/doceo/document/A-9-2022-0300_EN.html
Under this heading, various aspects have been addressed with a view to strengthening and
ensuring consumer protection in online video games. There is a need for parental control
tools and for them to be made available to parents who wish to use them, thereby enabling
them to monitor time spent playing video games and prevent excessive gaming.

b. Risks and benefits of online video games

With a focus on minors, the parliament examines the possible advantages and disadvantages
of online video games for residents of Europe. Consequently, emphasized the significance of
mental health, a problem that has intensified as a result of the COVID-19 epidemic.
Lastly, the motion emphasizes how critical innovation is to the online video game industry
and how new technology should be included into game design and production. The industry
is expanding and helping to alter the European Union digitally.

Furthermore, the information that should be made available to consumers before playing a
video game needs to be clear, transparent and accessible, thereby enabling them to discern in
advance what the content of a given game is exact.

C- Anti-Money laundering Practices

India

1) The law that governs the prevention of money laundering activity in India is the Prevention of
Money Laundering Act, 2002 (PMLA). It places requirements on "reporting entities" on the upkeep
and reporting of transaction data. Any person or organization engaged in in-kind or monetary games
of chance, including those connected to casinos, is considered a reporting entity. Operators that
provide games of skill are now exempt from the PMLA's duties as they are not categorized as
reporting businesses. Nonetheless, some sources indicate that the Central Government plans to
include operators of online skill games as reporting organizations under the PMLA.

Presently, the PMLA does not classify an operator offering games of skill as a “reporting entity” and
hence obligations under the PMLA currently do not apply to a game of skill operator. However,
as per news reports, the central government is seeking to bring online skill gaming operators in India
under the purview of the PMLA as “reporting entities”.

2) A person who wants to start or maintain a payment system must get authorization from the RBI,
according to the Payment and Settlement Systems Act, 2007 (the "PSS Act"). The RBI strictly
regulates the clearing, payment, and settlement services that payment service providers normally
offer. Closed-loop wallets and payment gateways, however, are not regarded as payment systems.
3) Under the Black Money (Undisclosed Foreign Income Assets) and Imposition of Tax Act,
2015 (“Black Money Act”), the Central Board of Direct Taxes (“CBDT”) published a circular
explaining the Black Money Act in further detail. The circular made it clear that anyone using an
offshore virtual or e-wallet account to play online poker or games and fund it with income that is
subject to Indian taxation but hasn't been paid, as long as the user makes money from the gaming,
they have to report the account information to Indian tax authorities. The circular states that a virtual
or e-wallet account is handled similarly to a bank account in that money can be moved into and out of
the account. As a result, an e-wallet account may be valued and declared similarly to a bank account.

4) Under the TN Act, banks, financial institutions, and payment gateways have been prohibited from
processing any transfer of funds for online gambling and real-money online games of chance
(including online real-money poker and rummy).

Abroad

1) The EU’s Fourth Anti-Money Laundering Directive 5 imposes obligations on gambling service
providers to monitor suspicious activities.

2) In the recent years China has been exerting more control over Macau’s gaming
industry. Regulations imposed in 2019 require closer scrutiny of customers and their sources of funds
to curb money laundering. China also banned proxy betting, where players use phones or agents to
gamble.

3) The Crown Casinos in Melbourne and Perth, Australia, are facing allegations that hundreds of
millions of dollars were laundered through their casinos between 2014 and 2019 via “junket”
programmes in which the casino and tour operators facilitated a period of gambling by high-roller
players from foreign jurisdictions.

4) As outlined by the UK Gambling Commission, it should take into account different risks that
exist at a country, product, transactional and customer level. Those responsible for detecting money
laundering in a gambling business should strengthen their capacity to detect common red flags.

5
https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=celex%3A32015L0849
 D- Suggestions

The legal framework around gambling in India is intricate and differs throughout states. Some states
have harshly outlawed betting and wagering activities, along with any actions meant to encourage
them, while others have adopted a more lenient stance against real money internet gambling. There is
now a regulatory murky area as there is no comprehensive regulation that addresses the legality of
internet gaming. However, it is essential to recognize that the Indian gaming industry is expanding
quickly, making the creation of a strong legal framework necessary to support this growth.
It appears that the government is having trouble creating the best possible regulatory framework for
the sector. The execution of these principles is still unclear despite attempts made in 2023 to put
essential measures into place, particularly in light of the Self-Regulatory Body (SRB) approach's
stalling. It is clear that the goal is to create a strong regulatory framework. The intention is to
safeguard players from possible financial disaster and stop fraudulent or gambling organizations from
passing for legal real-money skill-based gaming platforms, all the while keeping an eye out for the
industry's development prospects.
India has the opportunity to build a progressive framework by incorporating best practices from
around the world and tailoring them to India’s specific needs. It wouldn’t be unprecedented; India has
previously shaped policies based on international models, such as the recently introduced Personal
Data Protection Bill which was largely inspired by European Union’s General Data Protection
Regulation (GDPR) which set a benchmark for data protection and privacy laws worldwide. Similarly
the policies for Gaming and Sports can be inspired from policies of various other countries.
While India intended to offer a framework on similar terms, with the Self-Regulatory Bodies, it can
consider setting up a centralised regulatory authority with similar compliance processes, ensuring a
secure and trustworthy online gaming ecosystem in the country. Only operators who meet strict
safety, fairness and responsible gaming standards should be allowed.
The government should enforce these guidelines through the means of regulation, mandating these
norms of promotions and penalize operators that don’t follow them.
Drawing lessons from global precedents, India is in a unique position to synthesize the most effective
aspects of international frameworks – whether it be the UK’s national self-exclusion scheme,
Singapore’s integrated and centralized regulatory approach to regulate content and ensure social
welfare of its players, or enforcing stringent advertising guidelines like Sweden – and customize these
elements to resonate with India’s unique socio-cultural landscape.
India could witness unparalleled growth in online gaming and significantly contribute to the
Government’s vision of becoming a Viksit Bharat by 2047.