A fortnight ago, the government of Karnataka banned online gambling in the state. The ban extended to all kinds of gambling, including âany act of risking money or otherwise on the unknown outcome of an event, including on a game of skillâ.
This demolishes the subtle difference between what was once classified as a ‘game of chance’, where the outcome is not based on anything the players do, and a ‘game of skill’, in which the outcome can be. based on the skills of the players involved.
Karnataka is not the first government to ban online gambling. In fact, even before the ban on online gambling, we had seen the very ban on video games. On November 19, 1981, President Ferdinand Marcos of the Philippines banned video games in the country by presidential decree, making the Philippines the first nation to ban video games.
Again, in July 2016, the then President of the Philippines announced his plans to stop the proliferation of online gambling in the country and revoke existing licenses.
It specifically targeted Pagcor, a popular online gambling game. He blamed him for “the proliferation of gambling activities across the country.” He later changed his stance and went ahead with the regulation of the gaming industry. This brought him significant tax revenues.
However, a few years later, that decision snowballed and turned into a geopolitical issue with their not-so-friendly neighbor, China, firing on the Philippines for failing to ban these gaming apps while ‘they were heading for China. President Duterte has made it clear that banning these online games would have a significant negative impact on the Philippine economy.
However, that changed again in April of this year. The Philippines banned online gambling not because it harmed young people or the general population, but because the live streaming of the games choked the internet.
Closer to home we have seen a series of attempts to ban online gambling or gambling. The words gambling and gambling are used interchangeably and basically involve playing games online after betting on the outcome with real money. Starting with Andhra Pradesh and Telangana, Tamil Nadu, Odisha, Sikkim and Nagaland have also banned online gambling involving money.
The bans had different tints, with some states banning all kinds of online games involving betting. Others maintained the fine difference between game of chance and game of skill.
However, in all cases, they were driven by the need to protect ordinary citizens who fell in love with access to instant play anywhere and anytime that was ruining lives and families leading to suicides. . As a responsible government, we have to deal with the situation. This is not an easy question to resolve, as governments have been accused of interfering with people’s lives.
The companies that have provided such services, and built multi-billion dollar valuations, have taken up arms against state governments to ban online gambling. In fact, the Tamil Nadu government’s ban on online gambling has been appealed to the Madras High Court.
Unlike the case of Telangana and Andhra Pradesh, Tamil Nadu law has not prohibited the offering of online games. Online games involving skills continued to be exempt from the application of restrictions under the Tamil Nadu Gaming Act. However, the honorable high court of Tamil Nadu struck down Tamil Nadu’s gambling law, calling it “excessive and disproportionate” and ultra vires.
We are now seeing the gambling industry quickly go to the Karnataka High Court to appeal against Karnataka’s recent amendments to the Karnataka Police Act of 1963 which banned all forms of gambling in the state, including including online play.
India’s online gaming industry is expected to reach $ 3 billion by 2022. Over the past five years, the sector has attracted more than $ 350 million in venture capital investments from many investors from around the world. renowned brands such as Tiger Global, Sequoia, Raine, Tencent, Kalaari, Chryscapital and Matrix. .
Of course, the industry is not happy, and those who have gotten jobs through the gaming industry are not happy either. There have been many counter-arguments such as the need to restore the differentiation between gambling and gambling, and allowing the game of skill to continue.
Arguments have been put forward that even trading on the stock exchange is a bet and akin to a game of chance. Additionally, online gaming is recreational and has been a relief for many who were locked in their homes during the Wuhan Covid pandemic.
So, should the state really ban online gambling in India? Should the government tell adults what to do and what not to do when these people are not hurting anyone else and going about their own business? Should governments interfere in people’s lives?
The questions carry weight. Just as the Philippines has returned to allow online gaming by providing a regulated environment, Indian states are also considering regulations that may allow online gaming to operate with guarantees.
Telangana is currently working on a policy allowing players to operate in the state with guarantees. However, it would not be easy to make such a fine policy on the matter, given the pressure from civil society that builds up every time there is suicide due to online gaming.
Here again, this is a challenge that technology poses to regulators, in which regulatory frameworks are a step backwards from technology. Online games, like many things that have arisen from technological developments, can bring joy and destroy individuals and families as well. It would be interesting to see how we evolve as a society to create a safe operating environment for online gaming.
(This article was written by Dr Jaijit Bhattacharya, President, Center for Digital Economy Policy Research. Opinions expressed are personal.)