Online gaming companies should be made to use facial recognition technologies to verify the age of players, an inter-ministerial task force of the Union government has recommended, citing growing concern around addiction to such applications, especially among children.

The report of the task force, set up by the ministry of electronics and information technology (Meity) to begin work on new gaming regulations, includes recommendations from the Union ministries of home, sports and youth affairs, information and broadcasting, finance, law and consumer affairs.

Submitted to the Prime Minister’s Office in September, the report cites alarm raised globally – it notes the World Health Organization’s formal classification of gaming disorder as a disease in 2018 – and in India, where the National Commission for Protection of Child Rights (NCPCR) in 2021 outlined a long list of harms affected children suffer.

“Financial losses due to real money online gaming have led to suicides in various parts of India, including Gujarat, Madhya Pradesh, Andhra Pradesh and Tamil Nadu. There is a no regulatory framework to govern various aspects of online gaming companies, such as having a grievance redressal mechanism, implementing player protection measures, protection of data and IPR and prohibiting misleading advertisements,” said the report, a copy of which was seen by HT.

Such concerns have forced several countries to tighten rules and laws around online gaming. For instance, in 2019, China passed new regulations that restricted playtime for under-18 users: they are allowed to play only between 8am and 10pm for up to 1.5 hours during weekdays and three hours on weekends. Tencent, one of the leading gaming companies in China, uses facial recognition to enforce these usage limits.

The task force, according to the report, has also suggested that a code of ethics be developed for the gaming publishers and charters be laid down by self-regulatory organisations and reviewed by the government.

It also calls for provisions for restrictions for minors through algorithms, censorship of content that depicts violence or sexually explicit content, and parental consent mechanisms to complete in-app purchases.

The report sets out some distinctions. For instance, casual games not involving real money (as opposed to in-game currency) may be kept outside of the scope of such rules unless they have a high number of users, involve any sort of violence, nudity or addictive content, or lack an app certification. Games that pose a national security risk too should not be exempted from the regulatory framework, the task force suggested.

In-game money refers to imaginary currency used by the game, as opposed to real money, which is typically involved in betting and gambling games. The task force said that games involving in-game money too pose risks not unlike gambling.

“An online gaming involving ‘loot box’ or ‘virtual cash’ or any other similar features that make it easier for users to win a game should have regulations similar to gambling regulations as anything that the user wins out of the loot box is based on chance. Such platforms pose a risk of money laundering where addicted players are targeted for ‘skin gambling’, that is, illegal sale of loot box items in grey markets,” the report noted.

Mitigate societal harm“Any future rules to mitigate societal harms linked to online gaming must aim to empower users and parents. India must learn from experiences of countries like China and South Korea – that have failed to enforce prescriptive rules, including attempts to limit playing time. We must instead continue to build our own unique template for digital governance, one that priorities harm reduction over blanket prohibition, and user agency over digital paternalism,” said Vivan Sharan of Koan Advisory, a tech think-tank.

It adds that a regulatory body for the online gaming industry be created to define games on the basis of skill or chance, and accordingly certify different gaming formats, seek compliances and enforcement. While the long-term idea is to create a central law, the report also explores the possibility of enacting rules in the interim under the IT Act.

Since online gaming platforms can qualify as both intermediaries and publishers, they can be regulated through rules enacted under section 79 and section 69A of the IT Act, the task force noted. The set of rules may specify conditional immunities to online gaming platform while acting as intermediary from liability for third party content.

The central government, the report notes, has received multiple representations, including letters from the chief ministers of Andhra Pradesh and Puducherry, parliamentary interventions by different MPs, including two private member’s bills, and multiple representations from other stakeholders citing the need for regulations.

Various public interest litigations, including in the High Courts of Delhi, Allahabad and Bombay, have also been filed seeking prohibition or regulation of the online gaming industry to address the concerns around addiction and the toll they lead to.

The report takes inferences from the regulatory frameworks from other jurisdictions such as the United States, the UK, Singapore, Malta, Netherlands and Japan.

The report acknowledges that real money games of skill, roughly classified as E-sports, are a protected activity under Article 19(1)(g) of the Constitution of India as held by the Supreme Court.

E-sports therefore should be regulated by the ministry of youth affairs and sports and can explore the option to register professionals to differentiate them from minors, the report suggested. The nodal ministry for other online gaming platforms will be Meity, it added.

The ministry of home affairs has suggested that the issue of regulation of betting and gambling under a central law should be examined, while the department of revenue suggested KYC norms using e-Aadhaar and storage of data for at least five years be mandated. It also states that the self-regulatory form of oversight has not worked so far in the gaming sector.

MeitY also held extensive consultations with gamers to discuss regulating this sector. The issue of lack of rights of gamers under Indian law emerged during consultations and bodies representing players flagged state-specific bans on games of skill and chance, which led to criminalisation of platforms as well as individuals carrying out ancillary activities such as streaming and sound casting. The gamers should be represented in self-regulatory organisations that can be drawn up, the proposal suggested.