How India is Planning to Regulate Online Gaming

Recent news suggests that big changes to the online gaming industry are set to come into force in India in the coming months and years. Online gaming is currently on the rise in India, with the industry seeing almost 32 percent growth between 2021 and 2022. By the year 2026, it has been predicted that the gaming sector will be worth the equivalent of $7 billion dollars.

More people now head online to play a range of games at India’s top online casinos, including poker, blackjack, and slots. These types of games are popular with adults across the world and playing them online rather than in-person gives players better convenience and access to a greater variety of games.

Technological development and improvements in internet speed and reliability has made gaming more accessible in India, smartphone usage has increased rapidly in recent years and the cost of these devices has become more affordable.

This has contributed to a booming online gaming industry that we are currently seeing, with online real money casino games being a particularly popular segment.  It has now led to discussions in government and other stakeholder groups around the regulation of the industry.

What are the current laws and regulations for casinos and online gaming in India?

For land-based casino gaming venues, the law permits these establishments in some areas, including in the regions of Goa, Daman, and Sikkim.

At present, there are no federal laws in place that prohibit online betting in games. However, there are a number of states that do have laws in place explicitly prohibiting online bet-making. Many online gamers seek out offshore gaming sites as there is currently a much greater offering offshore when compared to the number of Indian based online gaming companies.

A cyber activity regulation named The Information Technology Act 2000 fails to make any reference to online gambling, this has created uncertainty for both game operators and players over what is and isn’t permitted. However, in the state of Maharashtra it has been explicitly banned under the Bombay Wager Act.

In recent years, there have been more calls from government officials and other interested parties to bring in regulation for online gaming activities. The thinking behind this is that it will improve the player experience and protect players from fraudulent activity and cybercrime.

What are the plans for regulation being considered?

In 2022, the government of India announced that all real money online games will be regulated. There was intense discussion over whether this would include a distinction between games involving skills and those that are reliant on chance, however it has since been decided that both gaming types will be treated the same under new regulations.

At the beginning of this year, the government published a draft document outlining plans for the constitution of online gaming industry self-regulation. Under these plans, online gaming organisations will be required to register themselves under a self-regulated body with nominated members that have a background in relevant fields such as law, public policy or public administration and finance.

Each organisation will also be required to appoint a Chief Compliance Officer role within the company. They will be responsible for ensuring the company abides by laws and regulations and that players can be verified before playing and accessing games.

Requirements often referred to know-your-customer procedures will soon come into force and mean that companies will need to ensure customers follow wagering rules and that the correct complaints and appeals processes are in place.

How the regulations could impact the Indian gaming market

The introduction of regulations and self-governance should have a positive impact on India’s gaming market. The quality of gaming operators available to players within India should improve as standards become higher.

The industry will continue to grow with or without regulation but introducing these rules should lower risk of illegal gambling and associated criminal activity. It should prevent harmful behaviours and hold gaming outlets responsible if they fail to look after their players.

One consideration that gaming companies will need to make will be around budgeting for the associated costs of self-regulation, including administration and the hiring of compliance personnel.

The government of India and planning to move ahead with online gaming self-regulation in 2023 and have gained the support they need to proceed with putting this into action.