UPSC Current Affairs May 25th 2026

Determination of an Online Game

Relevant Rules

The classification of online games is provided under Part III, Rules 8–11.

The Rules provide a determination test to decide whether a game is:

• An online money game, which is prohibited
• A permissible online social game
• An e-sport

When Determination is Triggered

Determination can be triggered in three situations:

1. Suo motu action by the Authority
2. Application by a service provider offering a game as an e-sport
3. Notification by the Central Government requiring a category of online social games to be determined

Rule 9: Objective Factors

Under Rule 9, the Authority will examine factors such as:

• Whether users pay fees or stakes
• Whether there is an expectation of monetary winnings
• Revenue model of the platform
• Whether rewards or in-game assets can be redeemed
• Whether rewards can be monetised outside the game

Rule 10: Time Limit

The determination process should, as far as practicable, be completed within 90 days of a complete application or notice.

The result will be recorded in a determination order. This order will be specific to the particular game and the particular service provider.

Registration of Online Games

Relevant Rules

Registration is covered under Part IV, Rules 12–19.

Registration is required only where the Central Government notifies such requirement.

This may be done after considering:

• Risk to users
• Risk to children
• Scale of participation
• Financial transactions
• Country of origin of the game

Registration is also mandatory for every online game intended to be offered as an e-sport.

Certificate of Registration

After successful determination and registration, the Authority will issue a digital Certificate of Registration.

This certificate will have:

• A unique registration number
• Validity of up to 10 years

Important Restriction

An online money game cannot be recognised or registered as an e-sport under the National Sports Governance Act, 2025.

Obligations of Registered Service Providers

Registered service providers must:

• Prominently display determination or registration details
• Display the unique registration number
• Designate a point of contact
• Comply with data retention directions
• Follow directions related to payment facilitation
• Observe user safety and transparency requirements

User Safety Features

Rule 2(1)(i)

Rule 2(1)(i) introduces the concept of user safety features.

These are technical, procedural, operational, behavioural and system-related safeguards according to the risk profile of the game.

Major User Safety Features

The Rules mention:

• Age verification
• Age-gating
• Time restrictions
• Parental controls
• User reporting tools
• Counselling support
• Fair-play monitoring
• Integrity monitoring
• Internal grievance mechanisms

Under Rule 23, service providers must disclose user safety features and internal grievance redressal mechanisms while applying for determination or registration.

Grievance Redressal and Appellate Mechanism

The Rules provide a two-tier grievance redressal and appellate mechanism.

First Level: Service Provider

• Every online game service provider offering an online social game or e-sport must maintain a functional grievance redressal mechanism.

Second Level: Online Gaming Authority

• If the user is dissatisfied with the service provider’s decision, or if the complaint is not resolved, the user may approach the Online Gaming Authority of India within 30 days.

The Authority should try to dispose of the appeal within another 30 days.

Further Appeal

• A second appeal lies before the Appellate Authority, that is, the Secretary, MeitY.
• The Secretary, MeitY should dispose of appeals, as far as possible, within 30 days of receipt.

Penalties and Enforcement

Relevant Rules

• Penalties and enforcement are covered under Part V, Rules 21–22.
• Proceedings may be conducted in digital mode, unless physical presence is required.
• Proceedings should generally be completed within 90 days of receiving a complaint.

Factors for Penalty

Penalties must be proportionate. The Authority must consider:

• Gain from non-compliance
• Loss caused to users
• Repeated violations
• Gravity of the violation
• Mitigation efforts by the service provider

Why the Act is Being Called Counterproductive

The editorial argues that the implementation of the PROG Act is proving counterproductive because users are shifting from domestic regulated platforms to illegal offshore platforms.

A blanket ban may reduce visible domestic real-money gaming activity. But it may not reduce user demand. Instead, it may push users towards underground, illegal and more dangerous platforms.

This is a major concern because digital products are not physical goods. Users can access them through:

• VPNs
• Private links
• Proxy servers
• Mirror websites
• Encrypted messaging platforms

Therefore, enforcement becomes more difficult.

Rise in Offshore Platform Use

According to the editorial, early studies suggest that offshore online betting and gambling platforms have seen increased usage after the PROG Act.

A study by CUTS International reportedly found a significant rise in offshore participation after implementation of the Act.

Data on Offshore Platform Use

• Delhi NCR: increased from 68.3% to 82%
• Tamil Nadu: increased from 67.8% to 83%
• Maharashtra: increased from 66.7% to 91.7%

Tamil Nadu Example

In Tamil Nadu, 67.8% of users reported using offshore platforms before the ban, often along with domestic real-money gaming platforms.

After the ban, this increased to 83%.

This shows an increase of 15.2 percentage points.

Why Offshore Platforms are Dangerous

1. They Operate Outside Indian Jurisdiction

Offshore platforms are difficult to regulate because they are located outside India. Indian authorities cannot easily ensure compliance, consumer protection or grievance redressal.

2. They May Support Money Laundering

Illegal online betting networks can be used to transfer illegal money through hidden digital channels.

3. They May Create Terror Financing Risks

If funds are routed through suspicious or illegal channels, offshore platforms may create national security risks.

4. They Increase Cybercrime

Fraudsters may use fake betting apps, Telegram links, WhatsApp groups and investment traps to cheat users.

5. They Use Advanced Evasion Techniques

Illegal operators use:

• VPNs
• Proxy servers
• Encrypted platforms
• Mirror sites
• Private invitation links

When one domain is blocked, users are quickly shifted to another domain.

6. They Weaken Consumer Protection

Users on offshore platforms cannot easily access:

• Refund systems
• Complaint mechanisms
• Fair-play protection
• Data protection safeguards
• Responsible gaming tools

Case Study: Sivaganga Online Gambling and Fraud Racket

A recent inter-State online gambling and fraud racket came to light in Sivaganga, Tamil Nadu, in February 2026.

The fraud involved a fake “Old Coin Purchase Task” promoted on Telegram.

How the Fraud Worked

• Victims were promised high returns through fake old-coin bidding schemes.
• They were lured into investing money.
• The accused procured mule accounts.
• Villagers in Sivaganga, Paramakudi and Kalayarkovil were persuaded to open bank accounts in exchange for small payments.
• These accounts were then used to divert proceeds of crime.

Importance of the Case

This case shows that online gambling fraud is not limited to urban areas. It can also affect rural and semi-urban communities.

It also shows the link between online gambling, cyber fraud and financial crime.

International Examples

United Arab Emirates

The UAE had a long-standing prohibition on gambling. However, in 2023, it moved towards a tightly controlled federal licensing framework.

The framework includes:

• Strict compliance requirements
• Deposit limits
• Harm-prevention safeguards
• Regulation to address offshore risks

This shows that even countries with restrictive systems are exploring controlled regulation to manage offshore gambling risks.

Sri Lanka

Sri Lanka is moving towards establishing a centralised Gambling Regulatory Authority.

It is expected to become operational by June 2026.

The aim is to:

• Consolidate gambling oversight
• Bring offshore online activity under a clear domestic framework
• Improve regulatory control

Significance of the PROG Framework

The PROG Act and Rules are significant because they attempt to create a structured regulatory framework for a fast-growing digital sector.

1. Protection of Youth and Vulnerable Users

The Rules provide safeguards such as age verification, age-gating, parental controls and counselling support.

2. Regulatory Certainty

The Rules create a clear process to determine whether a game is prohibited or permissible.

3. Promotion of E-sports

The framework allows lawful e-sports to grow under a registration regime.

4. Consumer Protection

Grievance redressal and appellate mechanisms give users a formal route to raise complaints.

5. Financial System Protection

The Rules aim to prevent banks, payment systems and financial institutions from facilitating transactions linked to prohibited online money games.

6. Enforcement Coordination

The Authority can coordinate with law enforcement agencies, financial institutions and State governments.

7. Digital Governance

The Authority is designed as a digital-first regulator, which is important for a digital sector like online gaming.

Major Challenges

1. Blanket Ban May Push Users Underground

A ban may not eliminate demand. It may shift users from domestic regulated platforms to illegal offshore platforms.

2. Offshore Platforms are Difficult to Control

They operate outside India and can avoid domestic regulation.

3. Technology-Based Evasion

VPNs, proxy servers, private links and mirror websites make enforcement difficult.

4. Encrypted Platforms

WhatsApp and Telegram can be used to circulate betting links and fraud schemes.

5. Consumer Protection Gap

Users on illegal offshore platforms have limited access to grievance redressal and legal remedies.

6. Financial Crime Risks

Illegal platforms may be used for money laundering, mule accounts and suspicious cross-border transactions.

7. Centre-State Coordination

Gaming, betting, police action, financial regulation and cybercrime enforcement involve multiple authorities. Coordination is necessary.

8. Risk to Legitimate Gaming Industry

Over-regulation may affect genuine gaming innovation, online social games and e-sports.

9. Difficulty in Identifying Real Money Games

Some games may use rewards, tokens, in-game assets or indirect monetisation. Classification may become complex.

10. Protection of Children

Children are especially vulnerable to addictive design, online manipulation and misleading reward systems.

Way Forward

1. Move from Blanket Ban to Strong Regulation

India should consider whether a regulated domestic framework with safeguards may work better than a complete ban.

The real policy choice is not simply between allowing and banning. It is between:

• A regulated domestic system with accountability
  or
• An illegal offshore ecosystem without oversight

2. Strengthen Online Gaming Authority of India

The Authority must have technical experts, cybercrime experts, financial intelligence support and adequate staff.

3. Improve Centre-State Coordination

There should be coordination between:

• MeitY
• Ministry of Home Affairs
• RBI
• Banks
• Payment gateways
• State police
• Cybercrime units
• Financial Intelligence Unit

4. Stronger Action Against Offshore Platforms

India should strengthen domain blocking, payment blocking, transaction monitoring and international cooperation.

5. Regulate Payment Channels

Banks and payment systems must be prevented from facilitating transactions linked to prohibited online money games.

6. Use Technology for Enforcement

Artificial intelligence and data analytics can be used to detect suspicious gaming platforms, payment flows and repeated fraud patterns.

7. Public Awareness Campaigns

Users should be educated about:

• Fake betting links
• Telegram frauds
• Mule accounts
• Online money traps
• VPN-based illegal platforms
• Risks of offshore gambling

8. Introduce Harm-Prevention Measures

Possible safeguards include:

• Deposit limits
• Time limits
• Self-exclusion options
• Warning messages
• Counselling support
• Parental controls
• Age verification

9. Test Controlled Regulatory Sandbox

Policymakers may test a controlled regulatory model to understand user behaviour, platform risk and enforcement challenges.

10. Use Tax Revenue for Enforcement

If a regulated ecosystem is developed, tax revenue may be used for:

• Offshore monitoring
• Cybercrime enforcement
• Awareness campaigns
• Rehabilitation support
• Player protection systems

Conclusion

The Promotion and Regulation of Online Gaming Act, 2025 and the PROG Rules, 2026 are important steps towards regulating India’s online gaming sector. They aim to prohibit harmful online money games while promoting safe online social games and e-sports.

However, evidence of rising offshore platform use shows that a blanket ban alone may not solve the problem. It may push users towards illegal platforms that are beyond domestic oversight.

India needs a balanced and practical framework. Strong regulation, user safety, digital enforcement, financial monitoring and Centre-State coordination are necessary to protect citizens while supporting lawful gaming innovation.