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E-sports are very popular online gaming competitions in which amateur and professional players take part individually or as teams in organised video game contests. They often come with monetary prizes, sponsorships and large in-person and online audiences. Taking place online or at physical venues, e-sports offer tournaments, leagues and exhibition matches. Issues of governance are concerning, however.

A significant problem for online games is their legal status. Indian law distinguishes between games of skill and games of chance, with the latter classified as gambling under the Public Gambling Act, 1867, and various state laws. Because e-sports usually require considerable skill, they are generally treated as games of skill rather than of chance. However, no law or regulation specifically defines an esport. If a particular game is challenged before the courts as game of chance and not of skill, courts decide on a case-by-case basis whether it involves skill or chance. Regulations for online games vary significantly across states in India, with some states even banning certain types of online games completely. To emphasise the distinction, the Ministry of Youth Affairs and Sports has oversight of e-sports, while the regulation of online gambling falls to the Ministry of Electronics and IT.

The protection, use, and enforcement of intellectual property (IP) rights is another factor which needs to be considered. Game publishers usually hold the IP rights to game code, graphics, music and characters. Event organisers must license such rights to avoid copyright or trademark infringement claims. IP issues arise from the streaming or broadcasting of e-sports content, for which event organisers have to grant licences. IP concerns extend to the trademarked personal branding of players and teams. Comprehensive IP strategies and agreements should define the rights and obligations of all parties involved.

E-sports participants, including publishers and event organisers, handle significant amounts of personal data, requiring them to comply with data protection laws. Presently the Information Technology Act, 2000, and its Sensitive Personal Data Information Rules, 2011, regulate data protection, but the Digital Personal Data Protection Act, 2023 (DPDPA), will impose stricter standards. The DPDPA requires consent to data collection, restricts data use and allows users to access and remove their personal data. These provisions are significant for e-sports because of the large number of young players and the requirement to obtain parental consent under the DPDPA will lead to increased compliance. Companies and e-sports platforms must also store user data securely to avoid breaches.

E-sports businesses must comply with cybersecurity and content regulations. Section 69A of the Information Technology Act, 2000, allows the government to block games or apps on national security grounds, a measure that has been used to ban some wargames. Organisations and platforms engaged in e-sports must adhere to the Information Technology (Intermediary Guidelines) Rules, 2021, which require the removal of unlawful content, such as hate speech or sexually explicit material and the establishment of grievance redress mechanisms.

Contractual agreements usually provide legal protection for professional e-sports players. Because such contracts are governed by the Indian Contract Act, 1872, and various employment laws, players must negotiate terms carefully to avoid unfair restrictions and future legal problems.

In December 2022, the Ministry of Youth Affairs and Sports recognised e-sports as sport in a positive move for the sector. This not only lent legitimacy to e-sports but also paved the way for structured support, funding and governance. The Commonwealth Games, the International Olympic Committee and the Olympic Council of Asia have added e-sports to their events. The Electronic Sports Federation of India acts as the national body for the development and regulation of e-sports, representing the country on various international bodies, such as the International E-sports Federation and the Asian E-sports Federation.

As the global e-sports market rapidly expands, India has emerged as a key player. The official recognition of e-sports and ongoing government support promise a successful future. Overcoming the obstacles of gambling laws, taxation, and IP and data protection will ensure that India’s competitive e-sports sector develops in a responsible way to attract top talent and investment.

Rajat Prakash is the managing partner and Siddharth Mahajan is a partner at Athena Legal