INDIA ROUNDUP
Indian gaming industry: investment destination 2023 FOLLOWING SOME KEY LEGAL DEVELOPMENTS IN 2023, THE SECTOR IS BURGEONING REPORTS TANISHA KHANNA AND COLLEAGUES
A lthough only 6 months old, 2023 has already been a transformative year for the Indian gaming industry with a number of legislative changes aimed at providing a sense of certainty and stability to this fast- growing industry. Taken together, these changes should mean that India becomes a very important investment jurisdiction for the gaming industry. The Ministry of Electronics and Information Technology (“MeitY”) was appointed as the nodal ministry for online gaming and the Ministry of Youth Affairs and Sports as the nodal ministry for sports in December 2022. 1 Appointing a central regulator responsible for these industries was a momentous step for the industry that had long-sought the Central Government’s recognition. One week later, MeitY proposed draft amendments to the Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021 (“IT Rules”). After considering stakeholder feedback MeitY published the final version of the revised IT Rules, primarily for online real money games, with
new regulations effective from its notification date, i.e., April 1, 2023 (“2023 Amendments”). The 2023 Amendments present a light-touch, co-regulatory framework between the MeitY and designated self-regulatory gaming bodies (“SRBs”). The primary focus of the 2023 Amendments is consumer protection, with a focus on the interests and safety of gamers across the country. While uncertainties continue on Goods and Services Tax (“GST”) regime, changes have also been made to the income- tax regime to provide clarity on the taxes to be withheld by gaming operators when players withdraw their winnings. On the flipside, regulatory authorities, including tax and enforcement agencies, have been proactive in implementing measures to curb the proliferation of remote offshore gambling operators in India. These efforts are aimed at ensuring compliance with the law and preventing offshore gambling operators from engaging in remote gambling activities within the Indian market.
1 Vide the Government of India (Allocation of Business) (Three Hundred and Seventieth Amendment) Rules, 2022 (“AoBR”) dated December 23, 2022
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IMGL MAGAZINE | JULY 2023
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