Section 12: Non-Compliance with Directions: Civil Penalties and Regulatory Actions

Overview

Section 12 of the Promotion and Regulation of Online Gaming Bill, 2025, outlines the consequences for online gaming companies and individuals who fail to follow the rules and directions set by the government or the regulatory authority. It focuses on penalties and actions the Authority can take if companies don’t comply with the law.

Key Provisions

• Penalties for Non-Compliance: A person failing to comply with directions issued under the Act can face a financial penalty of up to ₹10 lakh.
• Regulatory Actions: The Authority can suspend or cancel a company’s registration, or even prohibit them from offering, facilitating, or promoting online games.
• Due Process: Importantly, before any penalty or action is taken, the concerned party must be given a fair chance to explain their side.
• What Constitutes Non-Compliance: This includes ignoring directions related to game classification and registration, failing to remove prohibited content, continuing illegal advertising, not cooperating with information requests, and repeatedly violating rules about child safety, ad labelling, and accessibility.
• Escalated Action: Repeated or serious non-compliance can lead to even stricter penalties.

Practical Impact

This section significantly impacts online gaming businesses. They need to have robust systems in place to track and implement all directions from the Authority. Citizens benefit from increased safety and responsible gaming practices as companies are incentivized to comply with regulations. The government gains a stronger ability to regulate the online gaming industry and protect its citizens.

Examples

• Example 1: An online gaming platform receives a direction from the Authority to classify a particular game as a ‘real money game’ and implement age verification. If the platform ignores this direction, it could face a penalty of up to ₹10 lakh.
• Example 2: A gaming company continues to run advertisements promoting online gaming in a state where such advertising is prohibited. Despite receiving a warning from the Authority, they don’t stop. This persistent non-compliance could lead to the suspension of their registration, preventing them from operating in that state.