Government plans to Introduce Legislation to regulate E-Sports

There is speculation that Government of India is currently in the midst of finalising an extensive framework to regulate and structure the online gaming companies. The draft regulations are expected to be released in the near future, which shall covers aspects of data retention, grievance mechanisms as well as other pertinent issues currently plaguing the industry.

Reportedly, the government has engaged the assistance of an inter-ministerial task force, comprising of secretaries of finance, home, information technology, youth and affairs ministries as well as the Department of Promotion of Industry and Internal trade and NITI Aayog, for drafting of the legislation.

According to various publications, the regulation shall be a light-touch framework that shall co-exist with the state regulations already in place, such as the ones in Rajasthan and Karnataka. Another aspect which is currently under contemplation is whether the sector and its data related issues could be dealt with the Information Technology Act, 2000 and rules thereunder, or whether the proposed statute should contain provisions on this aspect.

As a background, on April 1, 2022, a private member bill was introduced in the Lok Sabha aiming to regulate the online gaming industry with a central piece of legislation. The bill sought to curb illegal online gaming and received industry backlash for failing to draw a line of distinction between casual gaming and gaming that involves money.

The recent update regarding the proposed statute has come as a relief especially in light of the speculation that the legislation shall be in consonance with the pre-existing state legislations and might not contain challenging compliances for stakeholders in the industry.