SUMMARY
MoS Rajeev Chandrasekhar said the Centre is “very bullish” about online gaming and would soon create a framework that envisages safe and permissible norms for the sector
The MoS also asked homegrown startups to comply with local laws, irrespective of their size, scale and growth momentum
In November 2023, reports surfaced that the Centre was mulling establishing a GoM to set up a regulatory framework for the online gaming industry
The union government reportedly plans to bring in a regulatory framework to oversee the online gaming industry.
As per The Indian Express, minister of state (MoS) for electronics and information technology Rajeev Chandrasekhar said that the Centre is “very bullish” about the sector and would soon create a framework that envisages safe and permissible norms for the sector.
“We are progressively going down the road of creating a framework that will allow safe, prosperous and permissible (online) gaming. I would tell all the entrepreneurs to keep faith. We hope after the third term of Prime Minister Narendra Modi is in place, we will create a much more stable and predictable regime for online gaming,” Chandrasekhar said while speaking at the Mumbai Tech Week on Monday (February 19).
He also highlighted the need for regulatory norms that distinguish safe and trustworthy online gaming from betting and money laundering, as per an Economic Times report.
The MoS reportedly said that the gaming industry is “mixed up perception-wise” with bad actors in the real-money gaming segment, including betting and money laundering.
On a separate note, Chandrasekhar also said that the proposals submitted by online gaming players for the self-regulatory body (SRB) had “too much of an industry component”. He added that the government wants the body to be as independent from the government and independent from the industry as much as possible.
This comes nearly three months after reports surfaced that the Centre was mulling establishing a Group of Ministers (GoM) to set up a comprehensive regulatory framework for the online gaming industry.
Back then, it was said that the proposed GoM would comprise prominent members of the Cabinet, including home minister Amit Shah, finance minister Nirmala Sitharaman, IT minister Ashwini Vaishnaw, and information and broadcasting minister Anurag Thakur.
The comments come at a time when the online gaming sector is reeling under the impact of increased scrutiny by the Centre. Be it the 28% GST introduced by the government or the flurry of tax evasion notices issued against online gaming companies, the sector has been facing the heat from authorities.
On top of this, earlier this month, a senior official reportedly said that the government had dumped the idea of SRBs and would directly regulate the space. As part of this, the ministry of electronics and information technology (MeitY) was said to be preparing a framework for permitting and certifying real money online games.
Meanwhile, amid the tax troubles, many players in the ecosystem have laid off employees in droves (MPL, Hike) or temporarily shut shop temporarily (Funtok, One World Nation).
MoS On Paytm, BYJU’S & Startups
Close on the heels of the Reserve Bank of India’s (RBI) crackdown on Paytm, the MoS also reportedly urged homegrown startups to comply with local laws, irrespective of their size, scale and growth momentum.
“… even if you are a hard-charging, successful, innovative entrepreneur, you cannot live in denial of the reality that there are rules and laws that have to be complied with, and that applies to big companies, small companies, startups, legacy (companies),” Chandrasekhar said as per ET.
Without naming Paytm, the MoS also said it is imperative for the financial regulators to establish boundaries to ensure legitimate transactions run through the ecosystem and ensure that crises are averted.
“A financial regulator will always look at harms like money laundering, know your customer (KYC), and the need to identify every transaction and make sure the transaction is legit. So, there is always going to be some sort of a boundary that a financial sector regulator will set. Otherwise, you will have what we saw in the US during the housing bubble meltdown,” added the MoS.
Pulling up BYJU’S for lax corporate governance guardrails, Chandrasekhar said that the edtech giant was an example of a company that expanded rapidly without establishing necessary corporate discipline.
