INDIA ROUNDUP
In this article, we will recap some of the key changes that have taken place in 2023 and explore why they signify a seismic shift for the previously unregulated or partially regulated Indian gaming industry. Background and context The regulation of “betting and gambling” in India falls under the authority of each State, as recognized by the Constitution. 2 Some States have adopted the Public Gambling Act, 1867, while others have enacted their own laws to regulate gaming and gambling activities, including online gaming. These laws generally prohibit games of chance or gambling activities, but make an exception for games of skill or preponderantly of skill, which are not regulated in most State laws and can be legally offered through any medium in most Indian States. The Courts have observed that skill gaming could also be regulated by States within their jurisdiction 3 . The Supreme Court 4 and various High Courts 5 have recognized games like Rummy 6 , Poker 7 , fantasy sports 8 , and betting on horse racing 9 as games of skill. However, it is important to note that there are certain exceptional states 10 where even offering games of skill are prohibited under their respective laws. The state-wise nature of gaming laws in India has created uncertainty within the industry, as the same gaming product can be treated differently depending on the state. This
disparity has led to calls for a central law and regulator to provide uniformity and clarity, especially for the online gaming industry. Although the 2023 Amendments do not replace state laws, they aim to address some concerns with respect to user protection by establishing a regulatory mechanism. In the long term, there would ideally be a detailed federal law for the online gaming industry and no state-specific laws.
Key features of the new 2023 Amendments
1. Games regulated The 2023 Amendments primarily focus on the regulation of real money games offered by online gaming intermediaries (“OGIs”) where a user makes a deposit in cash or kind with the expectation of earning winnings on such a deposit. It is worth noting that there are limited compliance requirements for free-to-play games, which are games that can be accessed and played without any monetary transactions. The 2023 Amendments specify certain games as “permissible” 11 including: • Online real money games 12 verified by SRBs, as explained later (hereinafter referred to as “Permissible Online Real Money Games” or “PORMG”), and • Online games 13 which are not real money games (i.e., games where there is no deposit or winnings).
2 Entry 33, List 2, Seventh Schedule, Constitution of India 3 All India Gaming Federation vs The State of Karnataka & Ors , W.P.No.18703/2021, Junglee Games India Pvt. Ltd. & Anr. v The State of Tamil Nadu & Ors. W.P.Nos.18022 of 2022 4 State of Bombay v. R.M.D. Chamarbaugwala , AIR 1957 SC 699 5 All India Gaming Federation v. The State of Karnataka & Ors , WP 18703/2021; Junglee Games India Pvt. Ltd. & Anr. v. The State of Tamil Nadu & Ors ., (W.P.Nos.18022 of 2020 etc.) 6 State of Andhra Pradesh v K. Satyanarayana & Ors , AIR 1968 SC 825; Head Digital Works (P) Ltd. v. State of Kerala , WP(C) No. 7785 of 2021, WP(C) No. 7851 of 2021, WP(C) No. 7853 of 2021 and WP(C) No. 8440 of 2021; Junglee Games India Pvt. Ltd. & Anr. v. The State of Tamil Nadu & Ors. , (W.P.Nos.18022 of 2020 etc.) 7 Junglee Games India Pvt. Ltd. & Anr. v. The State of Tamil Nadu & Or s., (W.P.Nos.18022 of 2020 etc.) 8 Shri Varun Gumber v Union Territory of Chandigarh and others CWP No. 7559 of 2017; Gurdeep Singh Sachar v. Union of India , Bombay High Court, Criminal Public Interest Litigation Stamp No.22 Of 2019; 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 9 Dr. K. R. Lakshmanan v State of Tamil Nadu , AIR 1996 SC 1153 10 Andhra Pradesh, Telangana and Tamil Nadu (in view of the recently notified Tamil Nadu Prohibition of Online Gambling and Regulation of Online Games Act, 2022. 11 Rule 2(1)(qf) of the 2023 Amendments - ‘permissible online real money game’ means an online real money game verified by an online gaming self-regulatory body under rule 4A. 12 Rule 2(1)(qd) of the 2023 Amendments - ‘online real money game’ means an online game where a user makes a deposit in cash or kind with the expectation of earning winnings on that deposit 13 Rule 2(1)(qa) of the 2023 Amendments - ‘online game’ means a game that is offered on the Internet and is accessible by a user through a com- puter resource or an intermediary
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IMGL MAGAZINE | JULY 2023
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