Emerging markets & culture
online Rummy 30 . To the best of our knowledge, the Tamil Nadu Ordinance has not come into effect as yet. However, Poker and Rummy operators have already commenced geo-blocking users from this state. b. Meghalaya In March, 2021, the State of Meghalaya introduced a licensing regime for games of skill such as Poker, Rummy, virtual sport fantasy sport games, among others, as well as games of chance 31 such as Baccarat, slots, and Roulette, through the state-wide intranet 32 . However, in October, 2022, the Chief Minister of the state announced that the state would be repealing Meghalaya Law. This announcement followed social and ethical concerns by church leaders in the state over the societal impact of permitting such activities. c. Rajasthan In May, 2022, the State of Rajasthan published a draft of Rajasthan Virtual Online Sports (Regulation) Bill (“Draft Bill”), proposing a licensing regime to regulate pay-to-participate formats of (i) Fantasy Sports, (ii) E-Sports, and (iii) Derivative formats of fantasy sport (i.e., formats of ‘fantasy based selection’). The Rajasthan High Court has recognized fantasy sport as a game of skill 33 . Only Indian citizens or legal entities incorporated in India are eligible for a license under the Draft Bill 34 . There are several inconsistencies and interpretational issues with respect to the Draft Bill. The Government has held consultations with the industry to iron out these issues. It is hoped that the final version of the Bill will take concerns into account. d. Kerala In September 2021, the High Court of Kerala struck down a February 2021 notification introduced by the state seeking to prohibit ‘online rummy when played for stakes, as
unconstitutional 35 . An appeal has been filed and is pending before a division (two judge) bench of the High Court. News reports also suggest that the State is planning to reintroduce a ban on online rummy on grounds of the rising suicide cases in the State 36 . The Draft Bill proposes a co-regulatory framework between the State and industry led self-regulatory bodies. TAKEAWAYS The issue facing the online skill gaming industry is certainty: certainty over whether their games qualify as games of skill, and are therefore permitted in most Indian states, as well as certainty on quantum of tax, and on what amount. Determination of parameters to determine skill in a game is critical for the growth of the industry that is constantly developing new games. Apart from the game formats recognized by the Indian courts as games of skill, several unique games of skill are being introduced in the diverse Indian market. It appears there may be some federal regulations in the offing which may bring about this certainty over a period of time. The certainty over GST rate will also assuage skill gaming operators’ concerns over applicable tax rates for the industry. The news reports of the IM Panel’s recommendations also suggest that player protection measures may be introduced, which will yield long-term benefits for the industry, as players will be able to play in a safe and trusted environment. For games of chance, however, it remains to be seen how things develop. The reports of the IM Panels’ recommendations suggest that the approach for games of chance will be left to the States. Therefore, some States may allow such games to some extent.
Tanisha Khanna is a Media, Entertainment & Gaming Lawyer at Nishith Desai Associates tanisha.khanna@nishithdesai.com +91 2261595019
Gowree Gokhale leads the IP, Technology, Media and Entertainment
law practice at Nishith Desai Associates, Mumbai, India
30 https://g2g.news/online-gaming-laws/after-tamil-nadu-puducherry-plans-to-ban-online-rummy-and-gambling/. 31 Section 2(j), read with Schedule A, Meghalaya Act. 32 Rule 8(c), Meghalaya Rules. 33 Chandresh Sankhla S/o Jagdish Singh v. The State of Rajasthan D.B. Civil Writ Petition No.6653/2019 Ravindra Singh Chaudhary v Union of India & Ors D.B. Civil Writ Petition (PIL) No. 20779/2019, Mohan Lal Nama W/o Late Shri Murlidhar Nama v Union of India & Ors DB Civil Writ Petition No. 11122/2020, Saahil Nalwaya v. State of Rajasthan DB Civil Writ Petition No. 2026/2021. 34 Section 4(2), Draft Bill. 35 Head Digital Works Pvt. Ltd. v State of Kerala & Ors., WP(C) NO. 7785 OF 2021. 36 https://www.onmanorama.com/news/kerala/2022/07/12/online-rummy-ban-kerala-suicide.html.
IMGL Magazine • November 2022 • 19
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