ERGO Analysing Developments Impacting Business: The Online Gaming (Regulation) Bill, 2022: More Confusion?

The Online Gaming (Regulation) Bill, 2022 (Bill) was launched within the Lok Sabha on 1 April 2022 as a non-public members invoice, within the midst of India’s most premier sporting occasion, and on the heels of the upcoming sale of media rights of the Indian Premier League, which is anticipated to fetch astronomical sums.

The Statement of Objects and Reasons accompanying the Bill has underscored that it has been launched with the twin goals of preserving integrity in on-line gaming and introducing a regulatory regime for on-line gaming. 

The market worth of the gaming trade in India was round INR 62 billion (USD 845.5 million) in 2019 and is estimated to go as much as over INR 250 billion by 2024 (USD 3.4 billion) (Source: Armed with the most important youth inhabitants on this planet, India stays one of the vital engaging markets for on-line gaming. However, owing to an absence of progressive regulatory coverage framework, the stakeholders (particularly, the authentic enterprise operators) within the on-line gaming trade in India usually face the brunt knee-jerk legislative actions, authorities investigations and lawsuits. 

Recognising the regulatory conundrum on this sector, the Bill seeks to implement a codified framework to streamline the conduct of on-line gaming platforms.


As the identify suggests, the Bill brings beneath its ambit all types of on-line gaming no matter whether or not it’s a recreation of ability or probability. The Bill envisages to determine a ‘watch-dog’ i.e. an Online Gaming Commission (Commission) which is to be constituted by the Central Government. The Commission shall have the facility to supervise the functioning of on-line gaming web sites and take measures to curb unlawful on-line gaming. Further, the Bill envisages a licensing regime and empowers the Commission to grant, droop and revoke licenses for on-line gaming web sites. Further, it bars any entity from working a web based gaming server or a web based gaming web site with out a license and even makes it a punishable offence. However, the Bill excludes individuals offering backend companies in India, together with internet hosting and maintenances companies, for any worldwide gaming web site based mostly outdoors India. 

Additionally, the Commission would have the facility to formulate guidelines regarding licensing, method of holding accounts, individuals who could also be permitted to play on-line video games, group or exhibition of on-line video games, circumstances for admissions of individuals and the charges to be charged, notices to be placed on the net gaming web site and circumstances concerning offering credit score amenities by a licensee to gamers of on-line video games, regulation of participation by proxy in on-line video games, and so forth.


Lately, numerous courts in India have nudged the state governments to look into the legislative void round on-line gaming within the state particular legislations (consult with our ERGOs here and here). The Bill seeks to place in place numerous checks and balances by delegating regulatory powers to the Commission. 

However, the Bill could also be extremely regressive because it fails to attract a distinction between informal gaming and actual cash gaming platforms. The want of the hour is to have a regulatory framework for actual cash gaming and never informal gaming, which is already ruled by numerous different legislations.

Further, the Bill doesn’t draw from the licensing regime at the moment in place for actual cash video games in sure legal guidelines handed by a number of North-Eastern states of India.

The Bill seeks to determine a centralised company by the Central Government which might have powers to manage on-line gaming. However, the Bill, if handed, might face authorized hurdles as playing has been a ‘statesubject’ and the Bill vests the regulatory powers to an company to be created by the Central Government, i.e., the Commission.

The Bill additionally fails to deal with sure impending points like Know Your Customer (KYC) norms, buyer grievance mechanisms, knowledge safety of the customers and different societal points.

An analogous invoice known as “The Sports (Online Gaming and Prevention of Fraud) Bill, 2018” was earlier launched as a non-public members invoice by Dr Shashi Tharoor within the Lok Sabha, in December 2018 which was extra sturdy and a barely extra complete draft protecting inside its ambit sports activities fraud and betting too. However, the Sports Bill lapsed with the dissolution of Parliament, previous to common elections in 2019 and was not reintroduced thereafter.

A strong regulatory and authorized setting, devoid of uncertainties is the necessity of the hour for this dawn trade to realize its true potential and be sure that the enterprise can scale shortly. 

In its present type, the Bill seems to be scanty. Notwithstanding the “suspect” constitutionality of the Bill, contemplating playing being a state-subject, it stays to be seen whether or not there may be sufficient political will to take this Bill ahead.

The content material of this doc doesn’t essentially replicate the views / place of Khaitan & Co however stay solely these of the creator(s). For any additional queries or comply with up please contact Khaitan & Co at [email protected].

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