Online gaming

India’s Online Gambling Bill: Unregulated by Nature – JURIST – Commentary

Nishka Kapoor, a law student at NALSAR University of Law in Hyderabad, India, discusses India’s Online Gambling (Regulation) Bill 2022 and its possible shortcomings…

The COVID-19 pandemic has changed the course of life in many ways. This has forced everyone to adapt to the new normal, leading to an inevitable increase in the use of digital technologies from work to socializing. We have also found various online ways to entertain ourselves, such as OTT platforms and online games. Although online gambling is entertaining, it has several legal, social, mental and monetary implications. Considering the growth of the online gambling industry in India, there is a need to develop proper guidelines for its safe usage.

According to a Statista surveythe market value of the gambling industry in India is nearly US$1 billion and could reach US$3.4 billion in 2024. Even according to the statistics provided in the Online Gambling (Regulation) Billthe online gambling industry in India could reach US$5 billion by 2025. This is due to the large youth population in India.

The recently proposed Online Gambling (Regulation) Bill 2022, a Private Member’s Bill, is a step towards the introduction of an online gambling regulatory system to maintain integrity in the context of online games. However, this bill may fail to curb illegal online gambling due to its regressive nature.

Decryption of the Online Gambling (Regulation) Bill, 2022

Under section 2(e), the bill defines “online gaming” as any game played on an electronic device such as computers, mobile phones, tablets and other similar devices. Thus, the first gap lies in the definition itself since it does not distinguish between “games of skill” and “games of chance”. This means that the bill aims to regulate all kinds of online gambling within its scope. However, the bill also fails to address regulations and distinctions between online casual gaming and real-money gaming. There is a need to regulate real money online gambling in India because a large part of the gambling industry in India is real money gambling. According to a 2021 survey by Statista, the value of real money gambling in the Indian gambling industry is INR 49 billion and will increase by INR 11 billion by 2025. real also led to many problems such as addiction, overspending. by users, mental and social issues, etc. And these issues associated with real money online gambling make it more important to have proper legislation in this segment of the gambling industry.

However, the regulation of real money online gambling should be crafted in a balanced way, which means that it should not hamper the growth of this industry, but at the same time curb illegal activities. For example, by adopting rigid laws and completely banning real money online gambling like the states of Telangana, Andhra Pradesh, Arunachal Pradesh and Odisha, it would end the growth of the real money online gambling industry. However, passing liberal laws like in the states of Goa, Sikkim and UT Daman where there is no ban on real money online gambling would lead to more illegal gambling and various other physical and mental problems. To grow and develop this segment, a balanced approach should be followed like in the states of West Bengal, Meghalaya and Nagaland. A set of prescribed regulations must be followed in these states to play these games online.

Section 3 of the bill proposed that the central government establish an online gambling commission. This commission would be authorized to oversee the functions of the online gambling industry, to write reports on issues related to online gambling, to suggest measures to control illegal online gambling, to grant, suspend and revoke licenses online gaming websites and determining license fees. license applications and renewals. This clause is similar to the Sports (Online Gambling and Fraud Prevention) Bill 2018, and this bill was not passed in parliament due to the ambiguities in the bill. The reason Term 3 is problematic in the 2022 bill is that the creation of a central online gambling regulatory agency without much clarity about the nature and type of gambling it is aimed at to be regulated will provoke a conflict between the center and the state. Below Entry 34, List II “Gambling” and “betting” are matters of state, which gives states the right to make laws on these matters. However, under 249 of the constitution, the central government has the right to legislate on matters on the state list in the interest of the nation. But, given the confusion and ambiguities in the bill, even if the central government uses this power and regulates gambling and betting, it would lead to more uncertainty.

Some states have already drafted laws relating to online gambling, and further regulations by the commission could lead to more confusion. Even though the establishment of a commission led by the central government is a good step to standardize the online gambling industry, the existing legislation of the various states must be moderated and the bill must be clearer. For example, the Games Control Board (GCB) established in the United States, is an agency of the federal government, and it is responsible for developing the regulations that dictate gambling activities in the country. It has established various strong rules taking into account the geographical area of ​​different states and other requirements that a gambling establishment must meet in order to obtain a license. India could also establish a central gambling commission by referring to countries with central authority in this sector and establishing appropriate rules and regulations.

The bill also lacks clear guidelines for a licensing regime, and that’s because nowhere in the bill’s standards and rules is there anything regarding a licensing policy for online games. real money line. In India, the gambling industry is one of the most progressive industries, and to increase its growth, there should be uniformity in the system to curb illegal activities. For this, a detailed and complete licensing policy is necessary. The bill could refer to the licensing regime of some states in India or foreign countries like the UK, which set licensing conditions and codes of practice. It has established several requirements that licensees must meet in order to obtain a licence.

The 2022 the bill is silent on privacy, data protection, know your customer (KYC), grievance systems and various societal and mental health issues. There is a need to address these issues as the gambling industry is growing in the country. A strong regulatory system would help curb illegal activities and help businesses grow rapidly, which would also help boost the economy.

Conclusion

The bill is a significant step forward for the gaming industry; however, it should be amended to make it more transparent and to extend its scope of control to include real money online gambling. Even if the establishment of a central commission for the supervision of the gaming sector is a good start, the scope of regulation under the jurisdiction of the commission must be clarified. The gaming industry is one of the fastest growing industries in India, and a comprehensive legal system is needed to protect everyone’s security and privacy.

Nishka Kapoor is a law student at NALSAR University of Law, Hyderabad, India.

Suggested quote: Nishka Kapoor, India’s Online Gaming Bill: Unregulated in Nature, JURIST – Student Commentary, May 23, 2022, https://www.jurist.org/commentary/2022/05/nishka-kapoor-online-gaming-bill-india/.


This article was prepared for publication by Rebekah Malkin, editor of JURIST. Please direct any questions or comments to her/his at [email protected]


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