Safeguard consumer interest: Whitelist online gaming platforms

Online gaming is a sector which has shown tremendous growth within the media and entertainment (M&E) sector, and has gained substantial traction in India. According to an EY report, the gaming community in India comprises 42.5 crore individuals, with the online real money game (RMG) sub-segment accounting for over nine crore gamers and 82.8% of the market share. The unique appeal of online RMG platforms lies in their ability to offer entertainment while providing opportunities for monetary gain.

Despite their popularity, online RMG platforms are open to scrutiny when it comes to consumer protection. A major concern is the proliferation of illegal betting and gambling platforms masquerading as skill-based online RMG platforms. Many of these platforms, operated by offshore entities, raise issues of money laundering, underage gambling and inadequate consumer protection. The allure of easy money attracts individuals across age groups, particularly the tech-savvy younger generation, leading to potential negative impacts on health, relationships, education, work and finances.

While legitimate online RMG platforms typically implement robust guidelines for responsible gaming, offshore betting and gambling platforms often disregard regulations. These platforms employ aggressive marketing strategies across various channels, targeting diverse demographics, including youth and children, with promises of monetary gain. This unethical approach poses significant risks to consumers.

The inability of consumers to distinguish between legitimate online RMG platforms and illegal betting/gambling platforms exacerbates the problem. Although the ministry of electronics and information technology (MeitY) has blocked several illegal websites and apps, many resurface with different domain names. The department of consumer affairs has issued warnings against advertisements and endorsements of online betting and gambling platforms by celebrities and influencers.

In April 2023, the central government amended the Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021, to regulate the online gaming sector. These amendments included definitions of different types of online gaming and recommended the establishment of self-regulatory bodies (SRBs) to verify permissible online real money games.

The regulation of online gaming lacks uniformity across Indian states. While some states have their own gambling laws or follow the Public Gambling Act, 1867, others have imposed blanket bans on gambling, betting, and online gaming platforms. These bans create regional disparities in access to new forms of online media and entertainment, potentially limiting youth exposure to technological innovations and affecting skill development and employment opportunities.

To address these challenges and protect consumer interests, the government should consider innovative mechanisms such as a whitelisting framework. This approach would allow only legitimate online RMG platforms to operate in the country, effectively segregating them from illegitimate betting and gambling platforms.

Whitelisting frameworks have been successfully implemented in other sectors of the Indian economy. For instance, the Reserve Bank of India recently shared a whitelist of lending apps with MeitY to combat illegal apps. A similar approach for online RMG platforms could help curb the proliferation of illegal betting and gambling platforms. The ‘default deny’ approach inherent in whitelisting means that all online platforms would be denied access to the digital ecosystem unless explicitly included in the whitelist with permission to operate.

From a consumer perspective, whitelisting would provide visibility of permitted and legitimate RMG platforms, fostering confidence and trust in the online gaming ecosystem. This trust is crucial for the sustainable growth of this emerging sector.

As the online gaming sector in India awaits a filtering mechanism for verifying permissible online RMG platforms, a whitelisting approach could be a significant step towards creating a safe and secure online gaming environment for consumers. This approach would not only protect consumer interests but also promote innovation and growth in the legitimate online gaming industry.

This article is authored by Ashim Sanyal, CEO and secretary, Consumer VOICE and Kaushal Mahan, senior vice president, Chase India, New Delhi.