According to a proposed set of regulations for online gaming unveiled on January 2, 2022, the Ministry of Electronics & IT (MeitY) has suggested banning marketing for online betting companies on social media sites, including Facebook, Instagram, and YouTube. The Indian Express broke the story initially in October regarding how these social media websites were overrun with these adverts and that soon the government would step in to stop them.
The government persisted in enforcing severe regulations to control the internet gaming market. The most recent development in this situation was MoS Rajeev Chandrasekhar’s announcement on January 3, 2023, that the government is planning to start a consultation process for online gaming with a self-regulatory body responsible for certifying what is allowed as an online gaming intermediary in the country. He also added that online gaming businesses would not be allowed to engage in bets on the results of games under the principle laid out in draft rules.
The proposed laws stipulate that before hosting an online gaming company’s adverts, the social media platforms should confirm from a self-regulatory agency that the company is registered with it. The self-regulatory organization, in turn, can now only register online games – betting platforms – that do not permit gambling based on an event’s outcome.
What led to these proposals being formulated?
In October, it was reported that accounts trying to promote online betting platforms were observed to be popping up relatively frequently on both Facebook and Instagram. Almost every second or third commercial was about an online gambling platform on the main home feed and between stories that people upload. This analysis involved looking at hundreds of betting advertisements on social media platforms. While these advertisements were not displayed on YouTube’s home page, they did show up when searches for online betting were done.
After the sector saw a rapid rise in the amount of advertising broadcast by online betting sites/platforms across print, electronic, social, and online media, the advisories were brought, continuing the previous advice issued by the I&B Ministry on 13 June 2022. In addition, the government has taken effective actions, including enacting new legislation, issuing advisories, fining offenders, etc., to protect consumers from these kinds of cyber-financial threats in the online betting sector.
What does the proposal aim at?
According to the proposed regulations, intermediaries, including YouTube and Instagram, will not be permitted to display adverts of online betting websites. The fact that a specific online game has already been registered with a self-regulatory organization must also be displayed on social media sites.
Center seeks help from Google
According to the Mint, which cited a person well-versed in developments in the Ministry of Information & Broadcasting, India has urged Google not to run surrogate adverts for foreign betting companies. In a letter in December, Google India, a subsidiary of Alphabet Inc., was urged to stop all direct and indirect advertising from betting sites like Fairplay, PariMatch, and Betway on YouTube and in search results.
Multiple advisories in a span of 8 months
Since it incorporates games of skill, real-money gaming is subject to legal ambiguity, whereas gambling (betting) is prohibited in most states. However, several platforms still promote betting services despite this. This is now the third warning in the previous 8 months: In June, the I&B Ministry issued a warning forbidding advertisements on betting platforms. However, these sites have circumvented the advisory by posting surrogate adverts, leading the Ministry to issue this second warning.
Closing the loophole using surrogate ads: When promoting restricted or prohibited products, such as betting platforms, surrogate advertisements are employed. Now, news websites are being used as a stand-in for betting platforms in online offshore betting businesses’ digital media marketing.
Important points to keep in mind!
- Keeping the safety of the gaming sector is especially important because approximately 40 to 45 percent of players in India are female.
- To supervise online gaming sites as middlemen, online game makers will need to perform additional due diligence, such as clear withdrawals and refunds of money after user authentication and a fair distribution of the rewards
- Additionally, online games would have to register with a self-regulatory body, and only those who receive approval from the body will be legally allowed to function in India.
- The Reserve Bank of India will require gambling companies to abide by the regulations set forth for organizations.
Any regulations relating to the internet are the federal government’s responsibility, whilst state governments are in charge of gaming legislation. This indicates that the parliament of India can only act if all states agree to pass legislation governing online betting or gambling. Even though the government hopes to reduce the risks associated with gambling with these recent proposals, we can all agree that this growing industry needs regulation to not only safeguard the prospect but also to help add a layer of safety for players and help stop them from losing their funds.