IndiaTech, an industry association for technology startups, has urged the government to frame guidelines for the online gaming sector based on age and genre-based classifications.

The industry association, whose members include leading online gaming companies such as Dream11 and Mobile Premier League, has written to Union Minister of Electronics and Information Technology Ashwini Vaishnaw to include “age-restricted content” and set standards similar to the Entertainment Software Rating Board (ESRB).

ESRB is a self-regulatory organization that assigns age and content ratings to consumer video games in the United States, Canada, and Mexico.

IndiaTech sent two letters to the IT ministry last week, classifying various formats as a game of skill. It sought civil society and industry collaboration to develop a code. It recommended that the code comprise policies that govern age and genre-based classifications, AI-based interventions to monitor and reduce potential addictions and cut-offs for money spent and wins, among others.

IndiaTech classified online gaming into eight categories.

It said online skill-based casual games and sports formats should be recognized as a category which is predominantly skill-based and is non-addictive. It also urged the government to come up with national guidelines that states can follow based on the distinctive categories.

The letters come at a time when state legislatures, and various Union ministries have raised concerns about the potentially addictive nature of online gaming in young children.

“People from the civil society feel that online gaming may be addictive and lead to behavioural issues besides causing financial stress,” said Rameesh Kailasam, president and CEO of IndiaTech. “Before the governments and lawmakers jump into any form of conclusion, we wanted to present guiding principles and means to regulate the industry and for government and industry to jointly work towards a Code for Responsible Online Gaming.”

The rating would help users make informed choices, according to the letter, making a case for standardised code and how online games are “non-addictive”.

The recommendations follow comments by Rajya Sabha MP Sushil Kumar Modi who said the online gaming industry is becoming the “major addiction” for young people in the country.

The Ministry of Education also issued a slew of advisories on Saturday in which it said that “playing online games leads to a serious gaming addiction which has been considered as a gaming disorder.”

Earlier this year, China implemented a law that prohibits children below 18 years from playing video games for more than three hours a week, citing the highly addictive nature of online games.

The online gaming industry has faced backlash in several states, including in Karnataka, one of the top three states in terms of revenue for the sector.

The Karnataka Police (Amendment) Act, 2021 came into effect on October 5, and banned online “games of chance”.

The same month, the police station in Bengaluru registered an FIR against Dream11 on a complaint from a city resident that it was violating the new law, which bans wagering and betting on online games.

In November, the Karnataka High Court extended a partial relief it had granted to the cofounders of Dream Sports, the parent company of online fantasy gaming platform Dream11, restricting the Bengaluru Police from taking any coercive action against them until further orders.

At present, most of the online gaming companies that allow users to play for money require them to be 18 years or above.

However, in the case of both crypto and stock trading, children under 18 are known to convince and utilise parents’ know-your-customer norms and bank accounts to trade.

The online gaming industry's growth has accelerated during the Covdi-19 pandemic as people found themselves stuck at home due to lockdowns.

According to a report co-authored by the Boston Consulting Group and Sequoia, there are now over 300 million gamers in India, and revenue across all gaming devices reached $1.8 billion in 2020, up 500% from 2016.

It is expected to reach $5 billion by 2025, according to the report, which was released in November.