Good morning [%first_name |Dear Reader%],

It’s Anushka and Soumyajit for Tech x Policy this week, and we say “bet” because we’re talking about gambling today. (Geddit? No? Not impressed? Cool, we’ll have to work on our headlines.)

This Monday, India’s Ministry of Electronics and IT (MeitY) came out with draft rules to regulate online gaming—essentially amendments to the IT rules, 2021. This was a quick turnover, given the ministry had been given the charge of handling online games less than a week ago. 

Now gaming companies, especially those colloquially called “real money gaming” companies (RMGs), have been clamouring for regulation for years. Why? Because RMGs like online poker and fantasy sports have often borne the brunt of inconsistent state gambling laws and legal challenges because they involve real money. 

And we’re talking about a serious amount of money—many firms in the RMG sector now make profits running into the hundred of crores. One could even say this is one of the most profitable startup sectors in India.

But are RMGs really gambling? That debate is old. Like going-on-from-the-60s old. So we’re going to skip it. Just like the IT ministry has, sort of. 

And we’ll start off our wagers with the ministry’s circumnavigation.

1. We bet the definitions will cause confusion

This isn’t so much a bet as it is an event already. The proposed amendment defines online games as those where a user “makes a deposit with the expectation of earning winnings”, and says the winnings can be “in cash or in kind”.

This clearly brings RMGs into the fold. But there is still some confusion about whether non-RMGs like, say Valorant or Call Of Duty, also come under this purview. They involve in-game and in-app purchases, but there is rarely any direct monetary return to the user in such games.

But even for RMGs, it isn’t so straightforward. The rules also prohibit “gambling”, and because gambling is a state subject and every state has a different set of laws, the term could include a wide range of games. RMGs themselves have often been brought under state gambling regulations or face legal challenges in high courts—most recently with the Tamil Nadu government’s ordinance that banned Rummy and Poker.

“The ministry is trying very hard to not infringe upon state gambling laws, and therefore the wording seems to have been left very broad”, a senior lawyer who has worked in the industry for years told us, declining to be identified.