The draft rules on online gaming released on Monday has barred betting on the outcome of games, while proposing a self-regulatory organisation for the industry, where the entities need to register themselves.

“As per the principles laid under the rule, wagering on the outcome of game will not be allowed. All online gaming companies will have to register with the self-regulatory body that will decide on the action required to be taken as per the rules,” minister of state for electronics and IT, Rajeev Chandrasekhar, said.

The ministry has published the draft rules and has invited comments from the public till January 17.

The government has proposed a self-regulatory mechanism, mandatory verification of players and a physical Indian address for the firms.

They will be covered under the new IT rules that were issued in 2021 for social media platforms.

Online gaming platforms are expected to comply with the laws of the land, including any such law that relates to gambling or betting.

“If you bet on an outcome of the game, it is prohibited. The self-regulatory organisations will develop filters and tests required to decide permissible gaming, be it a game of chance or game of skills or anything else,” Chandrasekhar said.

The draft rules prescribe additional due diligence for companies by displaying a registration mark on all online games registered by the self-regulatory organisation.

Users must be informed regarding its policy related to withdrawal or refund of the deposit, manner of determination and distribution of winnings, fees and other charges payable and KYC procedure for user account registration.

Even casual gaming entities need to register with the self-regulatory body.

“We hope that by early February we will have final rules,” Chandrasekhar said.

“This is a great first step for comprehensive regulation and will hopefully reduce the state-wise regulatory fragmentation that was a big challenge for the industry,” Roland Landers, the CEO of All India Gaming Federation, said.

E-Gaming Federation CEO Sameer Barde said the self-regulatory body would ensure a robust time-bound grievance redressal mechanism and registration of online gaming intermediaries.

The body will promote responsible gaming through age verification and rigorous KYC process and undertake safeguard measures against addiction, financial distress, etc. “These moves will eventually help the government establish a regulated and sustainable industry while promoting responsible gaming.”

A government panel had earlier recommended new rules to regulate a sector estimated to reach $7 billion by 2026, according to RedSeer.