Press Release

India boasts a staggering 568 million gamers, solidifies position as the second-largest gaming market worldwide, finds Treelife’s latest report

The report provides valuable insights into multiple aspects, including an overview of the Indian gaming industry, the constant inflow of investments, the evolving legal framework, and regulations defining the online gaming landscape, among others

 

India’s gaming industry is among one of the fastest-growing in the world, having evolved immensely on all fronts over the past few years. Alongside this, the regulations for existing and emerging companies, too, have changed over time. Treelife, a leading professional, multidisciplinary services firm of Lawyers, Chartered Accountants, and Company Secretaries, has analysed this evolution and released a report that acts as a guide for Indian gaming companies. The report, titled Power Play: A Regulatory Guide for Indian Gaming Companies, delves into the intricacies of this dynamic landscape. The following are some of the details the extensive report covers.

 

Treelife’s report begins by giving an overview of India’s vast gaming industry, which has seen remarkable growth with immense economic potential. The country boasts a substantial gaming community comprising 568 million gamers, out of which 25% are paying users. This explosive growth is fueled by a young and mobile-savvy population and has fostered a diverse ecosystem of gaming companies, each catering to a specific niche within the market. The industry’s momentum remained steadfast, with a cumulative investment of $3 billion from 2019 to 2022.

 

The report then goes on to cover the colossal investments that are pouring into this burgeoning industry. It shows that the gaming segment has attracted consistent investments totalling INR 22,931 crore between FY20 and FY24 YTD from both domestic and foreign sources. The sector has grown at a CAGR of 28%, reaching INR 16,428 crore in FY23, and is expected to reach INR 33,243 crore by FY28. Major Investors include Lumikai, Peak XV, Makers Fund, Accel, Bitkraft, Kalaari Capital, and General Catalyst. There are a few strategic investors also, including the India Hero Project incubator program, which supports emerging gaming studios.

 

Further, the report talks about the evolving legal framework in the industry. The legal landscape remains dynamic due to varying positions adopted by different states. Some states classify online gaming platforms as “common gambling houses,” even for skill-based games, contradicting interpretations in other states. Consequently, the distinction between skill and chance games is often assessed on a case-by-case basis by the respective state.

 

Offering in-depth insights into the legal elements that gaming companies must know, Treelife’s detailed report delves into the regulations defining the online gaming landscape. In an attempt to regulate online games and companies, the Ministry of Electronics and Information Technology (MeitY) released the Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Amendment Rules, 2023 (hereinafter defined as ITAR 2023”). This introduced the definition of an “online real money game” and outlined regulations.

 

The report also covers the compliance essentials for gaming companies in India. Aside from the secretarial compliances that gaming companies are required to do under the Companies Act, 2013, the Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Amendment Rules, 2023 has introduced the following requirements that gaming companies will have to comply with the following:

 

•     Privacy policy and user agreement: Gaming companies shall provide privacy policies and user agreements on their mobile applications and websites.

•     Data and information restrictions: Gaming companies shall not host, display, upload, modify, publish, transmit, store, update, or share any information which is restricted.

•     Periodic information to users: In case of non-compliance with rules and regulations, privacy policy, or user agreement.

•     Grievance redressal: Every gaming company shall, on its website or in its mobile application or both, publish the name of its grievance officer, contact details of the grievance officer, and mechanism to file a complaint in case of violation of the startups responsibilities. Such gaming companies shall acknowledge the complaint within 24 hours and resolve the same within 15 days of the receipt thereof.

•     Additional compliances for companies engaged in providing permissible online real money games: Appoint key personnel like Compliance Officer/ Grievance Officer(resident Indian) and 24/7 Law Enforcement Liaison. Provide clear user information regarding withdrawal/refund policy, winnings determination & distribution, fees, KYC procedures, deposit protection measures, and game framework. Publish monthly compliance reports (complaints & actions). Display verification marks from a self-regulatory body on such permissible online real money games. Verify user identity before accepting deposits.

 

To access the full report, visit the Treelife website.