Emerging markets & culture
Under Section 69 A of the IT Act, MeiTy is empowered 20 to issue directions to intermediary 21 platforms (such as internet service providers, network service providers, TSPs, etc.) to block access to content on certain grounds 22 . The grounds on which MeiTy has ordered the blocking of these websites are not clear on which ground but non-compliance by the intermediary with MeiTy’s order would result in loss of immunity from liability for unlawful content 23 hosted by them. Previously, MeiTy has ordered the blocking of several Chinese apps in exercise of these powers, in the interest of the sovereignty and integrity of India, defence of India, security of State, and public order . The MeiTy order blocking Chinese apps was issued due to security concerns over Indian user data raised by Ministry of Home Affairs , at a time when there was conflict at the Indo-China border. News reports suggest that GST violations and raised by GST authorities and violations of exchange control regulations raised by the Enforcement Directorate (ED) of India, were factors contributing to MeiTy’s decision to issue the blocking order. STATE-LEVEL DEVELOPMENTS With several developments happening at the federal level in India, there have also been significant state-specific developments. State-specific nuances in law have created business uncertainties for the online gaming industry in India. It is hoped that in time, with the introduction of a Central law, there will be uniform regulations pan–India. a. Tamil Nadu In August, 2021, the High Court of Madras struck down 24 certain amendments introduced to the Tamil Nadu Gaming and Police Laws (Amendment) Act, 2021, holding that the complete prohibitions on for-money games of skill under the Amendment Act as unconstitutional. While the State’s appeal
against the High Court’s order is pending 25 , the Governor of Tamil Nadu has provided his assent to the Tamil Nadu Prohibition of Online Gambling and Regulation of Online Games, Ordinance, 2022 (“Tamil Nadu Ordinance”) on October 1, 2022. Thereafter, on October 20, 2022, it was reported that the Tamil Nadu legislative assembly had passed a bill to ban online gambling and regulate online games to replace the Tamil Nadu Ordinance. A copy of the bill is not available in the public domain, However, it is likely to have the same or materially the same provisions as the Tamil Nadu Ordinance. The Tamil Nadu Ordinance seeks to (1) prohibit online gambling and (2) regulate online gaming. Games which (1) are preponderantly of chance, (2) which require superlative skill to dominate chance, (3) are ‘presented’ as involving an element of chance or (4) involve any element of random event generation such as cards, dice, wheel, are treated as ‘games of chance,’/‘gambling’ and are prohibited 26 . Poker and Rummy are specifically called out as games of chance 27 . This definition appears to contravene Supreme Court orders interpreting the meaning of skill as preponderantly of skill and holding Rummy as a game of skill. The Tamil Nadu Ordinance regulates online games (defined as any games except for games of chance) and has introduced a registration requirement for online games providers. Only local operators 28 (1) whose central management and control of the service is in Tamil Nadu, or (2) whose servers are hosted in the State, are eligible for registration. There is a provision 29 for the constitution of an online gaming authority, which may make recommendations to the Central Government (presumably, MeiTy), to block access to non-local websites. However, it is unclear whether MeiTy will act on the authority’s advice. Following Tamil Nadu, it was reported that Puducherry was also considering a ban on
20 Section 69 A, IT Act. 21 Section 2[(w) intermediary, with respect to any particular electronic records, means any person who on behalf of another person receives, stores or transmits that record or provides any service with respect to that record and includes telecom service providers, network service providers, internet service providers, web-hosting service providers, search engines, online payment sites, online-auction sites, online-market places and cyber cafes;]. 22 In the interest of the sovereignty and integrity of India, security of the State, friendly relations with foreign States, public order, or certain offences relating to these grounds. 23 Under Section 79 of the IT Act, an intermediary is accorded ‘safe harbour’ from liability for unlawful content made available or hosted by it, subject to com- pliance with certain conditions. One of these conditions is the intermediary take down content within certain timelines, upon being required to do so by certain authorities and courts. 24 Junglee Games India Pvt. Ltd. & Anr. v The State of Tamil Nadu & Ors WP Nos.18022, 18029, 18044, 19374, 19380 of 2020, 7354, 7356 and 13870 of 2021. 25 SLP (C) No. 19981-19988/2021 The State of Tamil Nadu & Ors v Junglee Games India Pvt. Ltd. & Anr. 26 Section 2(1): “online game of chance” includes any online game which,— i. involves both an element of chance and an element of skill and the element of chance dominates over the element of skill; or ii. involves an element of chance that can be eliminated only by superlative skill; or iii. is a game that is presented as involving an element of chance; or iv. involves cards, dice, wheel or such other device, which works on random or event generator. 27 Schedule to Tamil Nadu Ordinance. 28 “local online games provider” means an online games provider,— i. whose central management and control of the service is in this State; or ii. whose service that is available for access by the customers, is hosted in this State. 29 Section 15(2), Tamil Nadu Ordinance.
18 • IMGL Magazine • November 2022
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