The story so far: The real money gaming industry’s main industry organisations — the Federation of Indian Fantasy Sports (FIFS), the E-Gaming Federation (EGF) and the All India Gaming Federation (AIGF) all signed a code of ethics earlier this week. The code sets out standards for real money gaming firms to conduct business ethically and transparently.
What is the real money gaming (RMG) industry?
The RMG industry represents firms like Dream11, PokerBaazi and others who offer games where users can risk money that they either lose or win returns on. While many countries would classify these firms as gambling operators, the Indian judiciary has repeatedly upheld that games where there is a “preponderance of skill,” such as poker, where players can benefit better from playing a game well than those who don’t, are not classifiable as gambling.
As such, these firms are hard to regulate for States, even though under the Constitution, “betting and gambling” is a State subject. In Andhra Pradesh and Telangana, the industry is fighting a ban on fantasy sports in particular. Fantasy sports services entice player to create their own teams in an app, with real world player performance impacting outcomes on the fantasy apps. This is somewhat distinct from sports betting, where real world teams are directly wagered upon.
The RMG industry is extremely valuable, and has clocked revenue of $3.8 billion in the 2023-24 financial year, according to venture capital firm Lumikai. As the cost of providing the service is far cheaper than operating a real-life gaming house, the theoretical returns on this industry are massive. However, the industry has seen a slowdown in growth since a 28% GST rate was applied in 2023 to deposits players make with these platforms.
Why have these firms put out a code of ethics?
While the RMG industry has thwarted several legal challenges from States seeking to ban poker and rummy apps — such as in Tamil Nadu — the efforts by State authorities continue. The Tamil Nadu Online Gaming Authority (TNOGA) has published rules that have faced resistance from the RMG firms. These include Aadhaar verification and a blackout from midnight to 5 a.m., something the RMG firms have argued is arbitrary.
Since the Union government’s own rules on the RMG industry (more on that below) are yet to be implemented, RMG firms are under pressure to independently demonstrate a sense of responsibility, one industry executive said. Similar codes of conduct have been published before by the industry. For instance, AIGF put out its own charter for games of skill in 2022. Even the OTT streaming industry, under the aegis of the Internet and Mobile Association of India (IAMAI), put out similar codes of ethics before the government chose to regulate them through the Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021.
Further signals of legitimacy are incredibly important to the industry right now. The RMG industry has expressed particular concern about the competition coming from offshore gambling websites, which use mule accounts in India and constantly shift domain names to evade both capture and blocking. These firms are growing far faster than domestic players, one executive said, because they do not charge the 28% GST that local firms are subject to, nor do they comply with ID verification requirements.
What does the code of ethics stipulate?
Much of the newly released codes — similar to past such commitments by the industry — resemble closely to initiatives already taken by large RMG firms to demonstrate legitimacy: these include disclosures on advertising, age restrictions, identity verification, self lock-out features, warnings when a player has been on the platform for too long, and so on.
The code also requires firms to identify “vulnerable” players and work to block them. Other requirements include making sure “that the claims of total prize money are truthful, verifiable and not exaggerated,” “not imply that playing in online games will help fulfil social obligations or solve personal or financial problems,” and “not suggest that online gaming can provide an escape from personal or professional problems”.
“Operators shall offer players prominently displayed and easily accessible mechanisms to voluntarily set financial limits and/or alerts for losses and deposits on their gameplay,” the code says, which is another requirement that all the mainstream firms have already implemented for years.
The document comes into effect between 6–9 months from now, depending on the size of each firm.
Are there any regulations on RMG firms?
Aside from the TNOGA and other State-led regulations — which the industry has either complied with or fought in court depending on whether it lets them do business at all — the Union government has also put out an amendment to the IT Rules, 2021. This amendment, notified in 2023, formalized many of the self-regulatory steps (described above) that the RMG firms had already taken until then.
However, these rules have not come into effect, as the Ministry of Electronics and Information Technology has not recognised a single Self-Regulatory Body (SRB) which can formally oversee these firms. RMG executives have speculated that the government no longer wants to let the industry oversee itself, and wants to instead have rules that allow for more outside supervision. However, no draft rules in this direction have been forthcoming.
Published – March 14, 2025 07:02 am IST
