The Indian government has assigned the Ministry of Electronics and Information Technology (MeitY) as the nodal ministry to supervise the country’s nascent but developing online gaming industry, preparing for a hotly anticipated uniform regulatory framework to direct the country’s nascent but developing industry.

The government has been considering plans to manage the online gaming sector since early this year, however, a significant barricade has been the absence of a nodal ministry that can direct the sector, as online gaming intersects with multiple ministries including MeitY, Ministry of Information and Broadcasting (MIB), and Sports ministry.

The government set up a seven-member inter-ministerial task force in May 2022, led by Rajeev Chandrasekhar, minister of state for information technology, to work on online gaming regulations and to identify a nodal ministry for the sector.

In this way, the minister held multiple rounds of conversations with skill-gaming platforms, industry associations, lawyers, and gamers who sought a self-regulatory policy framework with a light touch.

This move is supposed to give more regulatory clarity to gaming startups accordingly helping the future development of the sector. The expanding Esports sector will go under the Ministry of Youth Affairs and Sports as a part of multi-sports events, as indicated by a gazette notification dated December 23, 2022, and published on December 26.

This development comes while India’s gaming sector has seen remarkable development in terms of application downloads and revenue because of the pandemic-induced lockdown in recent years. Revenue in the nation’s gaming sector expanded from $2 billion in FY21 to $2.6 billion in FY22 and is supposed to develop at a CAGR of 27% to $8.6 billion in FY27, as per a report by the gaming and interactive media venture fund Lumikai.

Yet, skill-based pay-to-play gaming, which represents more than half of the industry’s revenue, has experienced harsh criticism from a few state governments, including Tamil Nadu, Andhra Pradesh, Telangana, Kerala, and Karnataka, which have banned or tried to ban it because gambling is a state subject.

A significant number of these boycotts were subsequently challenged in state courts by skill gaming startups and industry associations, and the suspensions were overturned. In July 2021, the Supreme Court upheld fantasy sports as a skill-based game. The zenith court is as of now hearing the Tamil Nadu government’s petition challenging a Madras High Court decision that overturned the previous AIADMK-led government’s November 2020 ban on online games involving the transfer of amounts.

All India Gaming Federation (AIGF) CEO Roland Landers stated that a uniform central regulation for online skill gaming has been a long-standing demand of the AIGF and the industry.

“This step will hopefully lead to a progressive regulatory framework underpinned by consumer welfare, and further grow the industry and will help make online gaming a cornerstone of Digital India,” Landers said.

He also stated that the move to have the Ministry of Youth Affairs and Sports regulate esports as part of multi-sports events, will finally help in “recognition of an India Esports Federation, better rules and procedures for the selection of India teams for international events like Asian Games and also lead to better opportunities and facilities for our esports players on par with other sportspersons.”

Credit: MoneyControl