REAL-MONEY GAMING IN INDIA
contemplated to comprise of six persons, being a chairperson, as well as three members representing the Ministry of Youth Affairs and Sports, Financial Services, and Ministry of Information and Broadcasting. 17 The final two members must have special knowledge and experience with law. 18 The OGAI has both adjudicatory as well as regulatory powers and functions. As an adjudicatory body, it may inquire into complaints relating to online games, impose penalties, cancel or suspend registrations, and hear appeals from the Grievance Appellate Committees under the Act. 19 As a regulator, it is empowered to recognize, categorize and register online games, publish registries of such games, issue guidelines or codes of practice, and issue advisories, amongst others. 20 The Act prescribes penalties for non-compliance with orders and directions issued by the Authority. 21 The Draft Rules designate the Secretary of Ministry of Electronics and Information Technology (“MeitY”) as the appellate authority (“Appellate Authority”) to hear appeals from certain decisions of the OGAI 22 relating to determination of online games, registration and cancellation of registrations, and imposition of penalties. 23 Concerns have been raised regarding the concentration of Government members, and absence of independent members with experience in information technology, online gaming, consumer protection, amongst others, to bring balance to decision-making by the OGAI, and the Appellate Authority. Classification of online games and registration requirements The Act establishes three categories of online gaming with distinct regulatory classification and registration requirements for each:
(i)
Online money games:
The Act prohibits any person from offering any online money game or gaming service, amongst others. 24 An online money game is defined to mean an online game, irrespective of whether it is based on skill or chance or both, played by a user by paying fees, depositing money or other stakes in the expectation of winning which entails monetary and other enrichment in return of money or other stakes. 25 Critically, “other stakes” encompass “anything recognized or equivalent or convertible to money, including credits, coins, tokens or virtual items” , 26 hence operators offering even social games with in-app purchases, deposits and payments in cash or kind must examine whether they amount to ‘other stakes’ and hence online money games. The Draft Rules specify the criteria that will be used to determine whether an online game qualifies as an online money game, including whether the game involves money or stakes at any stage, including in-app purchases in the nature of wagers, and whether winnings, payouts or rewards are encashable or redeemable at any stage, amongst others. 27 The prohibition of all online money games marks a sharp departure from long-standing legislative and judicial recognition that real-money games of chance constitute gambling, while real-money games of skill are a constitutionally protected activity. The criteria for determining online money games under the Draft Rules remain ambiguous, leaving uncertainty over which monetization models would cause a game to be classified as an online money game. Apart from prohibitions on offering online money games, there are prohibitions on aiding, abetting, advertising, and
17 Rule 6(b), Draft Rules 18 Rule 6(c), Draft Rules 19 Rule 10, Draft Rules 20 ibid 21 Section 8, Act 22 Rule 2(1)(c), Draft Rules 23 Rule 11, Draft Rules 24 Section 5, Act 25 Section 2(1)(g), Act 26 ibid 27 Rule 13(1), Draft Rules
IMGL MAGAZINE | DECEMBER 2025
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