India: ASCI steps in to regulate online gaming

With the high penetration rate of internet among the Indian populace and through the increasing ease of accessibility to smart phones, there has been a substantial rise in online gaming in India.

A recent Business Standard article estimated that gaming apps registered an average user increase of 40-50% during the first half of 2020. The number of gamers are projected to further grow from 320 million to 470 million over the next two years.

As a general rule, platforms that offer ‘games of skill’, as opposed to ‘games of chance’, are permitted to operate, accept bets and allow consumers to play with real money. A court ruling in 2017 on Dream11, an Indian fantasy sports platform offering a ‘game of skill’, provided a boost for the validity of online gaming platforms.

The proliferation of new gaming apps and rising consumer interest during the COVID-19 lockdown period has led to Advertising Standard Council of India (ASCI) stepping in to issue guidelines in order to regulate advertising surrounding gaming apps.

With the renewed wave of popularity for fantasy games, prominent companies in the gaming industry have invested to establish a range of new brands and gaming formats in order to cash in on the fanfare.

It may be apt to clarify that it is not within ASCI’s purview to decide on the legality of such games. The objections relating to whether such games promote gambling must be taken up with the concerned sector regulators within the government. Thus, keeping online gaming trends and advertisements which appear on websites in view, ASCI, as a self-regulatory measure, has drawn up certain guidelines to monitor any misrepresentation or misleading advertisements, as these games do entail an element of risk of incurring financial losses.

The guidelines came into effect on December 15 2020. These were also necessitated as gaming advertisements can often target people by suggesting that gaming could be a legitimate source of income and a potential livelihood for them. Moreover, the press release from ASCI noted that the “frequent use of celebrities in many of these advertisements make them more attractive to consumers, and consumers tend to trust their heroes and role models blindly”.

The guidelines aim to inform advertisers, as well as members of the public, about the criteria that ASCI will use to scrutinise advertisements against which complaints are received:

1. No gaming advertisement may depict any person under the age of 18 years, or who appears to be under the age of 18, engaged in playing a game for real money winnings, or suggest that such persons can play these games.

2. Every gaming advertisement must carry the following disclaimer:

(a) Print/static: This game involves an element of financial risk and may be addictive. Please play responsibly and at your own risk;

i. Such a disclaimer should occupy no less than 20% of the space in the advertisement; and

ii. It should also specifically meet disclaimer guidelines laid out in the ASCI code.

(b) Audio/video: This game involves an element of financial risk and may be addictive. Please play responsibly and at your own risk;

i. Such a disclaimer must be placed in normal speaking pace at the end of the advertisement effective from December 15 2020;

ii. It must be in the same language as the advertisement; and

iii. For audiovisual mediums, the disclaimer needs to be in both the audio and visual formats.

3. The advertisement should not present online gaming for real money winnings as an income opportunity, or an alternative employment option.

4. The advertisement should not suggest that a person engaged in the gaming activity is in any way more successful when compared to others.

Taking into account the large number of advertisements appearing on television and other forms of media, the Ministry of Information and Broadcasting has issued an announcement requesting all private television broadcasters to follow the guidelines issued by ASCI.

It is expected that the guidelines will help to make online gaming safer and more transparent. Furthermore, the platforms will be expected to issue more responsible and truthful advertisements. Overall, it is a positive step for an industry that is estimated to reach $3.75 billion in value by 2024.

Managing partner, RNA, Technology and IP Attorneys

E: rnarula@rnaip.com

Partner, RNA, Technology and IP Attorneys

E: rsuri@rnaip.com