Anita Shekhar Castellino and Siddharth ChandrashekarDec 28, 2022 13:19:44 IST
This article is part of a larger series on Indian online games.dealt with in the previous article The possibilities and dangers of online gaming and the urgent need to regulate them. Click the link to read the article.
Recently, the Prime Minister’s Office opposed the distinction between games of ‘skill’ and ‘chance’ and called for greater central oversight of all types of games. This comes at a time when the Indian online gaming market is expected to grow to INR 3 billion in 2021 and double by the 2025 financial year. Description of KPMG reportThe number of gamers will grow to 657 million, with growth projected to reach 290 billion.
But before we delve into the upcoming changes, what measures are in place for online games today?
constitution of india Authorize State Governments to Legislate Related Matters bet When gambling See entry 34 When sports entry 33 of the state list of the seventh schedule. However, the state cannot make laws. skill game As it relates only to betting, gambling and sports, game of chanceThe difference between the two is very important in India. This is because the courts have repeatedly established that betting on games of skill is legal and betting on games of chance is illegal.
game of chance Or luck is based on pure luck and the odds of winning cannot be enhanced by a player’s skill, experience, and/or knowledge. Because they are based on unpredictable outcomes, there is no skill involved, which increases the uncertainty. Examples include table games such as baccarat, slot games, lotteries, blackjack, Patty and roulette.
game of skillOn the other hand, it takes a more principled approach. Prerequisite experience and extensive knowledge of the game are required for an individual to win, or be more likely to win. There is an identifiable learning curve in developing the necessary skills and honing them to adapt to different scenarios.
A game of skill can be won based primarily on the player’s expertise, whereas a game of chance uses a higher element of luck rather than the player’s effectiveness. Skill games include poker, blackjack, and various sports betting.
individual states We exercise our powers to completely ban gambling and games of chance. Therefore, different states have taken different steps to address gambling and sports regulation.
Public Gaming Act, 1867: In the absence of central-level legislation dealing with online gaming, several state governments have created legislation in the spirit of the Public Gambling Act, 1867. It is considered the law closest to gambling. The only downside and weirdest thing here is that it doesn’t define (online) gambling.
Similar to the Public Gambling Act, the Information Technology Act also applies to all states in India except those that have decided to enact legislation on cybercrime. It does not actually refer to gambling about betting, but it can be used to punish online gambling as India has legalized various online activities.
Meanwhile, a circular issued by the Central Direct Tax Commission in 2015 specifically deals with activities that fall within the scope of gambling: electronic wallet Alternatively, in the case of virtual card accounts maintained on offshore online gaming/poker websites, such accounts should be rated and declared in the same manner as bank accounts.
However, the gaps that exist in terms of clear legislation leave room for ambiguity of interpretation, thus creating both opportunities and legal risks for online gaming companies.
What are the courts saying?
Our courts have repeatedly stated that states cannot exercise extraterritorial jurisdiction over any subject matter, highlighting the erroneous exercise of jurisdiction in the fields of sports and entertainment.. Various courts have handed down a number of decisions, including:
- Online games and skill sports, whether wagered or not, shall not be construed as betting or gambling.
- States only have the power to make laws, regulate gambling, and wager on gambling activities.
- Playing online games and sports of skill forms part of Articles 19(1)(g) and 21 of the Constitution.
- A complete ban on online gaming is unconstitutional because it was not a reasonable restriction imposed on the fundamental rights granted under Article 19(1)(g) of the Constitution.
- Fantasy sports games are not only a legitimate business activity, but also a game of skill and gaming. There is no reason to interfere with the established legal doctrine that playing skill games for wagering is not gambling.
The Supreme Court of India has also established that there is a substantial element of skill and that the outcome is in the player’s control. Gameplay should be viewed as a skill and not the result of chance.
Claims of central regulation
The general lack of legal consensus around online gaming is a result of the lack of a regulatory structure in which some states use police or gambling laws and consider gamers to be (illegal) “gamblers.”
This makes Chennai poker players online pay-to-play chess players. Such individuals are criminals in Telangana, Karnataka, Andhra Pradesh and Tamil Nadu, but thorough professionals in Goa, Nagaland and Sikkim.
So far, online gaming has been a state jurisdiction, but governments have found it very difficult to enforce certain rules, such as geo-blocking certain apps and websites within their own territories. He said that he thinks
Creating a regulatory framework and providing much-needed legislative clarity will not only help curb underground activity, but will also create new revenue streams for governments. It is important to note that since the online gaming industry operates across India and has no physical presence, regulation by state legislative powers must take place within their territorial boundaries.
Central laws and regulations with a certain level of national autonomy allow uniform protection of data and intellectual property rights, privacy rights, a single uniform policy (skill-based or chance-based) regulating online gaming, allowing governments to will help you keep track of the situation. industry player. It can also enable mechanisms to track illegal applications and his website.Line games that must follow uniform rules and regulations, including registration processes, KYC verification, and complaints handling systems!
Siddharth Chandrashekhar is an advocate and attorney at the Bombay High Court, active in litigation and non-litigation, with expertise in negotiation, arbitration and corporate documentation.
Anita Shekhar Castellino is a Senior Lawyer at the Bombay High Court and the convener and founder of the Women’s Advocate interactive session that addresses issues facing young women advocates and interns.
Views expressed are personal.
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