Date: 19/01/2023

Relevance: GS-2: Government policies and interventions for development in various sectors and issues arising out of their design and implementation.

Key Phrases: Self-regulatory body, SRO ecosystem, cent compounded annual growth rate, Soft-touch approach, cyber bullying, games of chance.

Context:

• Recently the Union Ministry of Electronics and IT released the draft rules for online gaming for public consultation.

Key Highlights:

• The rules framed the approach of the self-regulatory body (SRO) that would be responsible for registering and approving games.
• The rules specify the mandatory know-your-customer norms for verification and stipulate a grievance redressal mechanism.
• The sector is also crucial for India’s leap towards the $1-trillion digital economy milestone.
• Therefore, harmonising the multiple legal positions of the state governments on the sector had become imperative.
• Online games require a player to make a deposit with the expectation of winning. These games can be broadly divided into ones that require skill and ones in which chance plays a major role.
• They could have a single or multiplayer format. Action games, card games, e-sports, fantasy sports and strategy sports are some of the genres of online gaming.
• Note: In the Indian context, games of chance are illegal and thus ruled out in the proposed SRO ecosystem.
• The new rules encourage the development of games of skill. They will be in three broad categories —
  • free to play,
  • pay to play and
  • play-to-earn.
• According to the rules, the board of directors of SROs will comprise industry representatives, information communication technology specialists and experts in psychology.
• There will be regular communication with the Centre about every registered game — this should act as the necessary oversight on the SRO.
• Audit mechanisms will have to be enforced and the loopholes that were found in cyber security audits should not be repeated in the sector.

Why centre is taking self-regulatory approach?

• Soft-touch approach: The Centre has taken a prudent step by adopting a soft-touch approach in the form of an SRO, rather than a regulatory body under the government.
• Draw investments: The self-regulatory approach could help draw investments that has, so far, been very subdued due to the variety of conflicting legal positions across states.
• The rules indicate that the government has two initial targets:
  • One, making Indian companies major players in the sector by encouraging innovative games and
  • Two, encouraging the growth of the Indian online gaming industry so that the online gaming economy comes to scale.
• The government is taking a calculated risk in using the self-regulation approach for the online gaming sector.

Challenges associated with Online Gaming

• Strong dependence on online gaming:
  • A large number of people are developing a strong dependence on online gaming. This addiction is destroying lives and devastating families.
• Dramatic increase in our screen time:
  • Compulsive usage of technology was heading towards becoming an issue and the pandemic managed to catalyse the steady journey. It has caused a dramatic increase in our screen time.
• Impact on children:
  • Young boys and girls are trapped in compulsive gaming, many spending as much as six to eight hours per day playing online games.
  • This is affecting their performance in school and straining their social lives and relationships with family members.
• Impact on Health:
  • Psychologists have opined that the opportunity cost of this is immense as the impact on health is growing with each passing day.
  • Online games like PUBG and the Blue Whale Challenge were banned after incidents of violence and suicide.
  • This addiction is also said to be causing near-sightedness in our youth.
• Rising incidents of cyber bullying:
  • Further, inadvertent sharing of personal information can lead to cases of cheating, privacy violations, abuse, and bullying.

Steps to boost the Gaming Industry

• To make a $25 billion industry the gaming industry needs the right entrepreneurial spirit.
• It needs to be supported through the right policy framework that gives operators-
  • An opportunity to innovate
  • Protects users from operator and self-abuse
  • Maximizes tax revenues without hurting the industry’s growth and innovation.

Conclusion:

• Requiring a participant to be 18 years and above is a good move.
• However, it remains to be seen how this is implemented — the experience with the now-banned PUBG indicates, teenagers are more hooked to online games.
• The regulatory approach will have to target the menace of offshore gambling platforms and illicit entities that advertise their products in several media.
• The onus is on the SROs to ensure a healthy ecosystem for online gaming.

Source: Indian Express

Mains Question :

Q. Briefly discuss online gaming industry in India. What are the challenges associated with online gaming? (250 words)