This post provides an overview of the Rajasthan Virtual Online Sports (Regulation) Bill, 2022 and our comments to the Bill
EDIT: Our comments to the draft Rajasthan Virtual Online Sports (Regulation) Bill, 2022 refer to the exit of MPL and My11Circle from the industry body FIFS in April 2022. Subsequent to the exit, three companies (MPL, Games24x7 (parent company of My11Circle) and Dream 11(continuing FIFS member)) released a joint statement clarifying that there is no disagreement between them on account of such exit. They’ve also clarified that they’re collaborating on creating a ‘unified gaming association’.
On 17 May 2022, the Rajasthan state government released the draft Rajasthan Virtual Online Sports (Regulation) Bill, 2022 (Bill) for public comments.
The Bill is intended to regulate pay-to-play ‘online competitions’ of ‘esports’, ‘fantasy sports’, and ‘derived formats’, defined collectively as “virtual online sports” (VOS). The Bill seems to deliberately exclude other online real money games of skill like Poker and Rummy from its ambit. Companies offering online games that are considered VOSs will need to obtain a license and work with government authorities, a gaming commission (i.e., Rajasthan Virtual Online Gaming Commission), and self-regulatory organisations, in Rajasthan. Companies will also need to meet the conditions of their license.
Key highlights of the Bill:
1. Emphasis on linkage to ‘real-life’ games/sports: There is an emphasis on VOS being connected to games and sports played in the real world. For instance, ‘esports’ must be ‘simulated versions’ of real-world sports like Cricket, Kabbadi, Football, etc. Similarly, ‘fantasy sports’ requires users to be able to ‘emulate’ coaches, selectors, and team captains to choose their teams. Derived formats too require ‘fantasy-based selection’ where the VOS is played based on knowledge and analysis of ‘real life products or services under the Act’. However, games like Poker and Rummy are excluded from these definitions, even though they are played in real life. The definition of ‘esports’ in its present form also excludes certain online games that are traditionally considered esports (e.g., DOTA2, Hearthstone). However, it does leave the door open for newer VOS to get recognised based on recognition by competent courts in India, recognition by self-regulatory organisations, and the Rajasthan government.
2. Licensing regime created by the Bill: The Bill creates a ‘licensing authority’ to provide licenses to VOS platforms. The ‘licensing authority’ will be a senior government official who can issue licenses for a period of 10 years. Licenses can be suspended or terminated sooner for violations of this Bill. License holders must keep records of each transaction for up to five years from the date of transaction. And must display the license and its conditions wherever the VOS is offered for play.
3. Standard setting, administration, and enforcement of the Bill: The Bill also creates a “Rajasthan Virtual Online Gaming Commission” (Commission) which is tasked with recommending conditions for licenses. The Commission will oversee the industry-led self-regulatory organisations (SROs) and their codes of ethics and governance. The Commission will also issue notices on VOSs in the public interest and provide reports to the Rajasthan government license holders’ operations in the state. Industry led SROs have a role in evaluating and certifying new VOS formats based on the criteria listed in the Bill . SROs will also play a role in resolving disputes between users and license holders in the state, through an ombudsman for addressing complaints. Finally, SROs can levy penalties for non-compliance with their charter or with advertising guidelines set out by the Advertising Standards Council of India. The Bill creates an “Adjudicating Authority’ tasked with investigating alleged violations of the Bill, levying penalties, and recovering losses from license holders.
Our comments to the Bill:
We submitted comments to the Rajasthan government and recommended:
- Creating a more inclusive definition of online games, to include poker, rummy, and casual games (e.g., arcade, board games, quizzes, etc.).
- Broadening the definition of ‘esports’ and removing the requirement that only esports recognised by international/domestic esports federations can be offered in Rajasthan
- The Bill should be self-contained and not place reliance on judicial determination of whether a game is a game of skill or not.
- Ensuring independence of SROs for player safety and for harmony among licensed operators of VOS in Rajasthan.
- VOS providers should also be allowed to appeal the SRO’s orders to the Rajasthan Virtual Online Sports Commission.
- Clarifying what is meant by ‘class’ of VOS, as the Bill envisages SROs for each ‘class’ of VOS.
- Providing a transition period for VOS providers operating in Rajasthan to get a license.
You can read our detailed comments and recommendations to the Bill here.
The draft Rajasthan Virtual Online Sports (Regulation) Bill, 2022 can be accessed here.
This post was authored by Shambhavi Ravishankar, associate, with inputs from Aman Taneja, principal associate, and Anirudh Rastogi, managing and founding partner, Ikigai Law
This blog was updated on 21 June 2022.