All India Gaming Federation's issues draft Model Charter for Online Gaming Self-Regulatory Body

Earlier this month, the All India Gaming Federation (“AIGF”), a skill gaming industry organization released a draft model charter, setting out guidelines for the self-regulatory body (“SRB”) that the AIGF is in the process of establishing in line with the recently notified Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Amendment Rules, 2023 (“Amendment Rules”). The recent charter released by AIGF outlines the necessary actions and measures which will be undertaken by the SRB and is applicable to AIGF members (or those seeking to become members).

For reference, the above-mentioned Amendment Rules mark a major amendment to the Indian Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021 (“IT Rules”) and provide for regulation of online gaming and various intermediaries engaged in providing services over the internet (including “online gaming intermediaries”) at the central level.

According to the IT Rules (as amended and up to date), “online gaming intermediaries” who seek to provide access to “online real money games” may only do so after receiving clearance from an “online gaming self-regulatory body” (as sought to be set up by AIGF). For reference, the IT Rules define an “online game” as a game that is available on the internet and can be accessed through a computer resource or an intermediary. Further, these define an “online gaming intermediary” as an intermediary which allows users of its computer resource to access one or more online games. Meanwhile, an “online real money game” is defined as one in which a user makes a deposit in cash or kind with the expectation of earning winnings on such deposit.

The key areas covered by the charter include the guiding principles for the SRB, criteria and compliances for the “online gaming intermediaries” which are or seek to become members of AIGF and SRB, the process and requirements for the approval of games and mechanisms for resolving grievances. Some of the key aspects of the charter have been analyzed by us hereinbelow.

The charter provides that an online gaming intermediary may seek membership in the SRB by adhering to the prescribed application process and submitting relevant details to the SRB in prescribed form. Membership in the SRB is stated to be granted for a duration of one year but can be renewed upon expiration.

In order to apply for membership, the applicant is required to adhere to the requirements in the charter. These include requirement to have a physical office located within India and to identify oneself as the operator of its online games by publishing and displaying its contact details (and those of its grievance redressal officer) on its platform. Only online gaming intermediaries that offer online real money games in adherence with the IT Rules are to be provided membership. To this end, the charter provides that relevant online gaming intermediaries must clearly disclose their terms and conditions, privacy policy and other policies relating to their games.

The charter also provides that the online real money game (as provided by an online gaming must be permissible (and a game of skill or skill predominant) in accordance with the amended IT Rules. Any games that involve wagering on outcomes or are purely based on chance are strictly prohibited. Further, members are prohibited from offering or targeting pay-to-play formats of games to minors (viz. individuals below the age of 18) and must ensure that such games are not accessible or directed towards minors.

In addition to the general membership requirements and obligations mentioned above, the charter lays out specific obligations for any AIGF member that offers online fantasy sports games, online rummy games and online poker games and requires the members operating these games to comply with the specific requirements and standards set out therein. As mentioned hereinabove, the charter requires that all games, including the abovementioned games, must be based on skill.

For instance, as regards online fantasy sports games, the AIGF charter requires that the formats of such games reflect involvement of the user's relative knowledge and skill. Further, that the winning outcome and all aspects of the concerned game be determined by verifiable statistical results or elements of players' performances, so to ensure that outcome is driven by the users' skill and understanding of the sport rather than chance. The charter similarity requires that the formats of rummy and poker games predominantly rely on the skills of the players rather than chance.

The charter provides that online games which meet the parameters in the charter shall be considered pre-approved games or “AIGF approved games”. If a member offers a game that does not fit within the parameters of a pre-approved game, however, they are required to apply for approval for that particular game from the AIGF Skill Games Council (“Council”) in the prescribed manner. The charter provides that the Council established by the AIGF will be an independent body comprising experts responsible for analyzing and evaluating skill-based games and promoting responsible gaming practices. Any opinion expressed by the Council regarding the level of skill predominance in a particular game shall be regarded as final by the AIGF.

Lastly, to address user grievances on any member's platform, the charter provides that AIGF will appoint an ombudsman (“Ombudsman”). The designated Ombudsman will be a retired judge from a High Court of a State or the Supreme Court. In the event that a user feels aggrieved by the actions taken by a grievance redressal officer of a member, they will have the right to approach the Ombudsman for the resolution of their grievances. The AIGF, in consultation with the Ombudsman, is expected to develop and release procedural rules governing functioning of the Ombudsman.