Centre warns against surrogate gaming ads

New Delhi: The ministry of information and broadcasting (I&B) on Friday issued an advisory, warning the media, social media platforms and related parties against enabling and carrying advertisements run by online real-money gaming (RMG) firms. It warned the parties concerned of “appropriate actions” under “various statutes” in a bid to prevent both direct and surrogate advertising of games that may qualify as betting or gambling.

“Advertisements of gambling or betting platforms not only pose significant financial and socioeconomic risk for the consumers, especially (the) youth and children, but have linkages to money laundering networks, thereby threatening the financial security of the country,” the ministry said in its advisory. It further said advertising intermediaries and social media platforms “have been allowing direct and indirect advertisements of betting and gambling platforms during major sporting events, including cricket tournaments… (with) tendency to spike promotion of such betting and gambling platforms during a major sporting event.”

The advisory urged these platforms “to immediately refrain from showing such advertisements or promotional content in any form whatsoever, failing with the government would be constrained to take appropriate action under various statutes.”

This comes a day after Mint reported concerns raised by the ministry in this regard. “With the World Cup and Asia Cup around the corner, there will be more of an emphasis on this. We are very concerned about online betting platforms that are leading to financial frauds and major irregularities,” Vikram Sahay, joint secretary in the I&B ministry, said on the sidelines of a gaming event in Delhi.

The ministry had also issued similar advisories in June and October last year, as well as March this year, on this matter.

Industry stakeholders said while the Centre’s stance on the real-money gaming sector hasn’t been ambiguous, a key concern lies in the implementation and enforcement of self-regulatory bodies (SRBs) in the online gaming sector mandated under Rule 3(1)(b) of the 2 January amendment of the Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021.

Jay Sayta, a technology and gaming lawyer, said, “The issue is SRBs for permissible online games have not been operationalized under the IT Rules, but the advisory mentions intermediaries requiring to carry only advertisements of ‘permissible’ online RMGs. If many advertisers and intermediaries have not been following advisories in the past one year, why isn’t penal action being initiated, and why is the government issuing warnings through advisories while not initiating any concrete criminal action against advertisers for flagrant violations?”

A senior policy advisor to multiple online gaming firms in the country, who requested anonymity, said the ministry of electronics and information technology (Meity) has not offered clarifications on a timeline for when the appointment of SRBs would be cleared.

“There have been multiple rounds of questions and clarifications between the Centre and multiple stakeholders of the online gaming industry about operating procedures and other particulars of SRBs. However, we are yet to receive clarity on when the mechanism would be implemented,” the advisor said.

An email query to a Meity spokesperson remained unanswered until press time.

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However, even without the establishment of SRBs, there are legal grounds for companies to face legal action for non-compliance with advisories.

Sayta clarified that restrictions on advertising would not be applicable to the nascent esports industry. The latter has, of late, begun striking partnerships with mainstream broadcast platforms to advertise and telecast tournaments such as Nazara’s Nodwin Gaming partnering with Star Sports to broadcast Battlegrounds Mobile India Master Series, and Krafton partnering with streaming platform JioCinema for live telecast of its Battlegrounds Mobile India Series this year.

“Statutes that can be applied on illegal online gaming firms and advertisers carrying ads of such platforms include state gambling acts and the Consumer Protection Act. If there is evidence of money laundering, illegal foreign remittances and tax evasion, then laws such as the Foreign Exchange Management Act, 1999, Prevention of Money Laundering Act, 2002, the Goods and Services Tax Act, and the Income Tax Act will also be applicable,” he added.