At least three states in India have sought to curb the online gaming industry, which has been experiencing an explosion of growth recently amid the coronavirus pandemic. Yet state officials have yet to win in their quest to “curb the menace” supposedly brought on by gaming.
States want citizens ‘away from vice of gambling’
India doesn’t have a common legislation that governs the online gaming space, which resulted in many state governments to turn to the archaic Public Gambling Act (PGA) as their regulatory framework for policing not just casual betting site activities, but also skill-based gaming in their territories.
Tamil Nadu’s amending Act redefined “gaming” to include any form of wagering, whether in person or online, except for lotteries. The Kerala government followed suit with its amendment to the provisions that effectively ban online rummy in the state. The goal, according to the state officials, is “to curb the menace of gaming through the internet, mobile app, to enhance the punishment for gaming for the orderly conduct of citizens, and to wean them away from the vice of gambling.”
The Madras and Kerala high courts disagreed and quashed the amendments on grounds that they are not only arbitrary but also violate the right to trade and commerce.
Undeterred, Karnataka is now making its own move to outlaw gaming in the state via an amended law that redefines gaming to include online casino activities and casual games with a wagering element. Several petitions have been filed before the Karnataka high court, all of which seek to halt the statewide ban on grounds that the Supreme Court has already ruled that online games of skill are protected under Article 19(1)(g) of the Constitution.
India online gambling regulation needs a multi-dimensional view
For government officials, a statewide ban is the black-and-white solution to the thriving online gaming industry. What they neglect to see is that the online gaming market is operating in a grey regulatory landscape, one that cannot be resolved with an end-all-be-all clampdown as industry has many variables to take into consideration.
Even the courts have opined: “Morality and depravity cannot be pigeon-holed by degrees depending upon the classes of the audience.”
India has seen a 35 percent increase in player volume one monthly basis during the pandemic, putting it at the top spot ahead of Russia (30 percent), Indonesia (26 percent), Brazil (23 percent), United States (13 percent), United Kingdom (11 percent), Japan and China (7 percent each), Canada and Germany (6 percent each), South Korea (5 percent), and France (3 percent), according to an ENV Media report on offshore gambling licenses and regulated markets.
This is a largely untapped market, one that offers an economic boost to state governments from its many revenue generating verticals, not to mention its capacity for job creation and tax contribution. It is puzzling why state officials are moving towards banning online gaming—which will only result in the rise of illegal operations and potential scams—instead of regulating the industry,
Yes, the key here is uniform regulatory framework that will pave the way towards a licensing regime that will protect both the players and the operators. India needs to look at how authorities in longtime regulated markets are operating, and how these jurisdictions are harnessing the wins brought by licensed gambling operators and service providers.
As experts at ENV Media pointed out: “India is a particularly emblematic case of similarly impending regulatory needs. The prohibition of betting is widely seen to have been ineffective. In such contexts, certain authority recommendations cannot be overlooked. Emerging markets (India in particular but not only) will benefit from creating their own Central regulatory framework, a Gambling oversight body, and a Consumer Data protection regulation.”
- As per the Public Gambling Act of 1867, all Indian states, except Goa, Daman and Sikkim, prohibit gambling
- Land-based casinos are legalized, with certain guidelines, in Goa and Daman, as per the Goa, Daman and Diu Public Gambling Act 1976
- Land-based casinos, Online gambling and E-gaming (games of chance) are legalized in Sikkim under the Sikkim Online Gaming (Regulation) Rules 2009
- Only some Indian states have legalized online/regular lotteries as per and subject to the conditions laid down by state laws. Kindly refer to the same here
- Horse racing and betting on horse racing, including online betting, is permitted only in a licensed premise in select states. Kindly refer to the 1996 Judgement by the Supreme Court Of India here and for more information
- This article does not endorse or express the views of Qrius and/or any of its staff.
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