Legal Guide to India’s Gaming & Entertainment Industry
The growth of the gaming and entertainment sector in India has been staggering and is projected to record even greater growth in the coming years. From traditional skill based games, to esports competitions, this emerging industry is full of opportunities for individuals and businesses. However, the gaming and entertainment industry is dynamic and it is not enough to just come up with ideas that are creative – you’ll also need to be aware of multiple legal compliance and licensing requirements.
Getting a Handle on the Gaming Ecosystem in India
Types of Gaming Platforms
The Indian gaming ecosystem consists of a number of formats, each with its own governing laws – The key types of gaming platforms are:
- Skill Based Games include fantasy sports, poker, rummy and quiz based gaming platforms in which player skill will largely determine the outcome of the activity. In India, these gaming formats generally are viewed more favourably as they rely on skill consideration rather than chance.
- Casual and Social Games include mobile gaming apps, online games on social media, gaming platforms primarily for entertainment and user engagement, etc. While these formats have generally more flexibility for regulatory compliance, it does not mean that you don’t need to have the right legal compliance.
Esports and Competitive Gaming consist of fully organized tournaments, streaming platforms, and professional gaming leagues. This growing section requires specialized contracts, protection of intellectual property rights, and an agreed set of tournament rules and regulations.
Real Money Gaming includes platforms that allow users to win real money. Real money gaming requires strict compliance obligations and explicit licensing requirements.
Entertainment Platforms and Digital Content
As well as gaming, entertainment can involve streaming services, content creation platforms, digital content distributor, and interactive entertainment experiences. Each of these classes raises its own legal issues, including the complications with content rights and licensing, user data protection, and platform liability.
Essential Licenses and Regulatory Obligations
Licenses and Regulations from Core Government
Where the gaming activities have turnover in excess of certain thresholds, include in your budget GST Registration. The gaming industry can face complexity surrounding GST, particularly in classifying services and attaching the appropriate GST.
- FEMA compliance is critical when your business involves international transactions. If your business receives foreign investments or is considering conduct cross-border gaming you must also consider compliance with FEMA and a formal business process to consider and comply with obligations.
- The Information Technology Act would be relevant to what you would consider when protecting data, physical security and cyber security measures, so having a plan for developing a privacy policy, terms of use and data handling process is important.
State-Specific Regulations
Gaming laws differ considerably among the states of India; in fact, some states have distinct gaming acts governing various gaming activities, while others profess only general gambling laws. Thus, there is a legal scheme for each of the states where you are operating that you should have an understanding for purposes of being compliant with the legal regime.
Skill Gaming Regulations vary state-by-state, and although some states have specific allowances for skill-based gaming, many states take a restrictive approach. If you understand the differences in state skill gaming regulations, look at how event betting becomes a skill gaming matter.
Advertising and Marketing Compliance means following state law, which often imposes restrictions to limit advertising types and often requires disclaimers.
Industry specific licensing
Digital Media & Content Licensing, which encompasses intellectual property rights, content distribution agreements, and platform licensing, has certain nuances that are particularly important in the area of entertainment platforms and creator content.
Payment Gateway & Financial Services Compliance is conditional upon secure payment, and compliance within the relevant legal jurisdiction (obligations being a robust governance framework relating to payment aggregators, RBI requirements, KYC requirements).
Age verification & user protection measures are becoming increasingly commonplace – as part of market lessons from Covid in addressing the number of instances of underage gaming, and implementing responsible gaming protections for consumers. These are both significant mediums within the future of gaming.
Compliance Framework for Gaming Websites
Technical Compliance
Website compliance is not limited to license acquisition, but also includes implementing good technical safeguards. These technical safeguards include secure payment processing, encryption of data, user verification systems, and responsible gaming tools.
The Privacy Policy and Terms of Service must be adequate, legally enforceable and updated periodically as regulations change. These documents comprise the gateway into the user relationships and may provide legal protection.
Content moderation systems are essential for any platform that has user-generated content. If you are going to have effective content moderation policies in place, it is an excellent way to prevent legal issues and enforce platform integrity.
Ongoing Compliance Monitoring
Gaming businesses must establish systems for ongoing compliance monitoring. Compliance monitoring takes into account legal reviews, policy adjustments and changes in regulation in various jurisdictions.
Legal reviews are generally undertaken on an annual basis (or as required) that ensures ongoing compliance with changing law. Laws dealing with the gaming industry are being changed regularly, therefore gaming businesses must keep up with changes and apply the changes within a reasonable time.
Documentation and Records require keeping accurate documentation of licenses compliance, comprehensive documentation of all compliance activities as well as documentation and records of their dealings or correspondence with any regulatory body, which is useful for audit purposes, however, could be required in the case of any initial or subsequent legal action.
How Emerge Legal Can Assist Your Gaming Business
Comprehensive License Acquisition
Emerge Legal offers a comprehensive license acquisition service for gaming and entertainment businesses that includes navigating the complexities of licenses required by multiple government agencies. Our experienced team understands the differences between gaming categories and can assist you and streamline the process for acquiring a license to operate in these various jurisdictions.
Emerge Legal provides a comprehensive service to obtain your licenses from start to finish, including application preparation and obtaining final government approval. Our services include obtaining central government licenses, state licenses, as well as the certification of your industry-specific and business model licenses.
Strategic Legal Planning
Our services include strategic legal planning that goes beyond simply obtaining a license and supports your business growth. We review your business model and identify best practices for protecting your business against potential legal issues while also ensuring compliance.
Risk Assessment and Mitigation involves understanding where legal issues may arise before they become an issue for your business. We help companies minimize risk and avoid negative consequences of costly compliance failures and regulatory disputes.
Regulatory Change Management involves determining how changes in the regulatory framework may impact your business. Once we know the regulatory details that might impact your organization, we can identify areas for examination and potentially clarify for the purpose of updating your compliance framework.
Website and Platform Compliance
Emerge Legal provides a comprehensive package of website compliance services tailored around gaming and entertainment platforms. Our focus includes drafting legally sound terms of service and privacy policies for managing user interactions, as well as other user agreements that clarify limitations of liability and protect your business interests while also maintaining user transparency.
Technical Legal Integration involves working with your development team to build in technical compliance features directly into your platform. The aim is to preserve the user’s experience while confirming that legal obligations are being met.
Ongoing Compliance Support involves continuous compliance through monitoring, and when necessary updating your platform to fit changing regulations and platforms.
Dispute Resolution and Legal Safeguarding
Our litigation and dispute resolution service supports your interests when legal challenges happen. We provide experienced representative and tactical assurances to resolve matters unplanned for, like property rights disputes through to regulatory investigation.
Preventative Strategies using documentation, enforceable contracts and taking risk management strategies prevent business from the common pitfalls.
Crisis Management provides, more quickly protective assistance against a professional or initiating regulatory or compliance actions, the resulting legal requirements occasional can be large. Now having documented provisions can provide assistance to your rights to complete your business where possible by limiting business down-time and logistical disruption during compliance investigation.
The Road Ahead: Building a Legally Firm Gaming Company
Achieving successful gaming and entertainment business has a challenge of balancing innovation with legal compliance: the regulatory environment continues to shift presenting challenges and opportunity for proactive business.
Creating, or bringing in to focus a legal infrastructure in to operations, processes and culture from the outset, makes regulation and compliance easier, cost effective and less time consuming than working towards a response to resolves compliance issues. Including all the safety approvals, procurement of licenses, the creation of systems enabling compliance quickly, and oversight to assure legal compliance by all staff.
Future-Proofing Your Business means keeping abreast of the change and putting in-place systems for compliance, that you can quickly modify to comply with regulated changes. As an organisation if proactive you will avoid the reverse consequence of making you business comply operationally with regulations while your business plans and sustainability grow and evolve.
Competitive Advantage Through Compliance provides evidence that legal compliance can become a strong competitive advantage. Legally compliant legal structures build customer confidence and trust, provide partnership opportunities, and allow expansion into new markets.
The gaming and entertainment industry represents significant opportunities for business, if you can correctly understand the legal requirements. With legal advice, clear compliance plans, and ongoing compliance organization, your gaming venture can be a success, and in total compliance!
Contact Emerge Legal and we can help turn your gaming venture into a legal, compliant and successful entity. With our expertise in gaming and entertainment law, we will work with you to ensure your business remains compliant today and into the future.
–Tanya Arora
(Legal Trainee, Emerge Legal)
