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Policymaking is important in balancing the interests of regulation, innovation and consumer protection. At its core should be the well-being and rights of consumers, ensuring their safety and security. However, it is equally important to promote innovation by providing a conducive environment for businesses to thrive and develop new products and services. In my experience, balancing regulation and innovation is essential to promote growth and competition while protecting consumer interests. Ultimately, successful policymaking requires a delicate balance that benefits all stakeholders involved.
Over the years, India has worked towards building a robust digital ecosystem. Unlike other countries, we have taken a bottom-up approach to develop scalable solutions that build trust for technology among people. With the Digital India initiative at the centre of all our efforts, we aim to create a $1 trillion digital economy by 2027-28. But this rapid digital adoption has also increased cybersecurity threats, raising geopolitical tensions and threatening to compromise national integrity. Illegal players offering loans, betting and gambling apps further exacerbate these risks, making it critical for countries to strengthen their cybersecurity. These threats not only target individuals and businesses but also have the potential to disrupt critical infrastructure and create discord on a global scale.
In India, several betting and gambling apps registered in countries such as Cyprus, Malta and Curacao present themselves as legitimate platforms bypassing Indian regulatory and tax obligations. These apps lure consumers with their marketing techniques by promising monetary gains. These activities violate several Indian regulations, including the Foreign Exchange Management Act of 1999, the Payment and Settlement Systems Act of 2007, the Information Technology Act of 2000 and the Prevention of Money Laundering Act of 2002. In response to the threat posed by these platforms, the Ministry of Electronics and Information Technology (MeitY) which is also the nodal ministry for the online gaming industry has blocked a total of 581 apps till December 2023, of which 174 are betting and gambling apps and 87 are loan providing apps. The Ministry of Information and Broadcasting (MIB) and the Central Consumer Protection Authority (CCPA) have issued advisories against the promotion and advertising of illegal betting and gambling platforms.
Given the gravity of the situation and the problems it poses for the country and its citizens, there is a need for policy intervention by the government. A recent report released by the Rashtriya Raksha University (RRU), titled Curbing online betting and gambling: Necessary for national security The report has made several important recommendations to effectively deal with the persistent problem of illegal betting and gambling platforms. One important suggestion is sustained and prompt action under Section 69A of the IT Act. This will involve a more systematic approach to identify illegal platforms through better collaboration between government agencies, followed by prompt issuance of blocking orders to Internet Service Providers (ISPs), network service providers, web hosting service providers, and other intermediaries. ISPs play a critical role in preventing access to restricted content, and their cooperation is essential for timely enforcement. In addition, the report has also recommended setting up a comprehensive registration mechanism to create a whitelist of legitimate online real money gaming platforms. This will help users identify legitimate operators, thereby enhancing regulatory oversight and consumer protection. There is also a need to include online betting and gambling activities as scheduled offences under the Prevention of Money Laundering Act, 2002 (PMLA). This will further strengthen India’s anti-money laundering framework, enabling authorities to effectively disrupt the financial networks that support these activities.
The government is working towards creating a safe and secure digital ecosystem. In line with this, CERT-In under MeitY is working to enhance the security status of the country’s digital infrastructure. It collaborates with various stakeholders including government agencies, businesses and individuals to raise awareness about cyber threats and promote best practices for cybersecurity. However, there is a need to address the growing challenge of illegal applications through a strong legislative framework, comprehensive regulatory mechanism, strict enforcement and strong stakeholder collaboration.
India has around 820 million internet users and trust among these users is the key to the success of India’s digital ecosystem. This trust has enabled technology like UPI to grow from 92 crores in FY 2017-18 to 8,375 crores in FY 2022-23. To maintain this trust we must weed out players who compromise the security of people. For India to grow as a digital superpower, policies must meet the needs of the growing ecosystem while protecting the integrity of the nation and its citizens. India is uniquely positioned to lead the world in establishing regulatory frameworks to address risks and opportunities while balancing innovation. Learning from the experiences of the West and the East, India has an opportunity to showcase its policymaking prowess in the regulation of the digital space.
This article is written by Alkesh Kumar Sharma, former Secretary, Ministry of Electronics and Information Technology, Government of India.
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