AIGF Proposes Light Regulation to Make India a Global Gaming Hub

A conducive ‘light-touch’ regulatory environment and robust support mechanisms should be established to allow India to emerge as a global gaming innovation hub, contributing significantly to the country’s economic and cultural growth, proposed the All India Gaming Federation (AIGF). Representing over 150 members in the online gaming sector, the AIGF recently submitted its proposals to the Telecom Regulatory Authority of India’s (TRAI) consultation paper on the National Broadcasting Policy 2024.

In April, the TRAI released a Consultation Paper on ‘Inputs for Formulation of National Broadcasting Policy-2024’ (NBP). In response, the AIGF highlighted the exponential growth of India’s online gaming industry, currently valued at $2.2 billion and projected to reach $4 billion by 2026. The federation emphasized the need for a progressive regulatory framework to harness the sector’s potential.

“There are over 450 million online gamers in India, and the pay-to-play gaming comprised 83 percent of the sector’s revenues with free-to-play games and esports exhibiting robust growth,” the AIGF pointed out.

In a statement regarding the consultation, AIGF CEO Roland Landers commented on the industry’s infancy and the necessity for organized legal structures. He echoed the Prime Minister’s call for top-down regulation and light-touch regulation to uplift the reputation of online gaming and facilitate its growth.

“We continue to advocate for a progressive regulation focused on consumer safety, competition, and ease of innovation, and believe that with a progressive regulatory and tax framework, online gaming can become the cornerstone of the $1 trillion digital economy as envisioned by the Hon’ble Prime Minister,” Landers commented.

In its written opinion, the AIGF stressed the importance of regulations focused on consumer safety and innovation facilitation while seeking regulatory clarity. The federation praised the Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021, for distinguishing between games of skill and chance, safeguarding consumer interests, and ensuring responsible gaming practices.

However, the AIGF highlighted the need for the effective implementation of these rules, calling for the designation of self-regulatory bodies by the Ministry of Electronics and Information Technology (MeitY). These bodies could incorporate lessons learned from the IT Rules into the upcoming Digital India Act, fostering a comprehensive regulatory environment for all online games.

The AIGF also underscored the challenge of illegal offshore gambling sites and their advertising, emphasizing the necessity of coordinated efforts to combat them. The federation proposed leveraging the IT Rules’ verification marks to identify legitimate games and curb illegal platforms’ reach.

“At present, the proliferation of online offshore gambling poses a significant threat to Indian users. Such online platforms are illegal in most states under their public gambling laws, as these platforms offer games of chance,” the document shows.

The AIGF highlighted the significant tax losses caused by illegal betting activities, with an estimated inflow of $100 billion per year and a GST loss of 28 percent of that amount. Offshore online gambling operators are estimated to collect $12 billion per year from Indian users, causing a loss of at least $2.5 billion per annum in GST alone to the national exchequer.

In October 2023, a 28 percent tax on online gaming, casinos, and horse racing was implemented, scheduled for review after six months. The additional taxes increased government revenue fourfold from the sector, despite sharp responses from the online gaming industry, with operators claiming huge losses.

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The AIGF suggested the implementation of verification marks for permitted games under the IT Rules to enable MIB, ASCI, advertisers, and the public to access a whitelist of legitimate online games and identify content belonging to unmarked illegal gambling platforms.

Lastly, the AIGF advocated for the implementation of Animation, Visual Effects, Gaming & Comics (AVGC) recommendations in mission mode to support Indian game developers and promote cultural gaming content globally.

Source:

‘Light-touch’ regulation needed to elevate India as a global online gaming hub: Association, agbrief.com, May 15, 2024.