INDIA ROUNDUP
Promising steps; but still a way to go The legislative clarity introduced through the IT Rules has brought about much-awaited certainty to the online gaming industry. Indian courts may be less likely to determine whether games are permissible or not, as they will rely on the regulatory mechanism under 2023 Amendments. Banks, payment service providers and others are likely to be more amenable to onboarding verified OGIs, reducing operational issues for such businesses. Users may be more comfortable playing on the platforms of verified OGIs which offer a level of consumer protection. The overall success of the rules will depend upon their implementation by designated SRBs. Such legislative certainty is therefore likely to foster increased investment in an industry that is already growing at an astronomical rate. 41 However, the level of state comfort and buy-in to the new rules remains to be seen, as evidenced by states like Tamil Nadu, which has implemented a ban on games of skill regardless. The new law is being challenged before the Madras High Court, 42 and the case is currently pending before the Madras High Court. Foreign operators’ eligibility to offer online games remains unclear and will require resolution of exchange-control issues. In addition, remote offshore operators, particularly those offering gambling products, are likely to face continued enforcement action under the 2023 Amendments.
News reports suggest that some operators subsequently sought to bypass the ban by changing their website URLs. 35 • It was also reported 36 that the Central Board of Direct Taxes (“CBDT”) was investigating offshore online gaming platforms that have been evading taxes due to the Indian government. The tax authorities have also contacted offshore gambling entities seeking data on Indian players. • The domestic Indian operators and self- regulatory bodies 37 have also become very active in pointing out activities being offered and advertised by offshore gambling providers to Indian regulators. • Direct and surrogate advertising of foreign sports betting platforms in India has come under close scrutiny by the Ministry of Information and Broadcasting (“MIB”) and the Department of Consumer Affairs. In fact, the MIB issued several advisories in respect of the same. 38 • In October 2022, the Central Consumer Protection Authority invoked provisions under the Consumer Protection Act, 2019 and issued show- cause notices to six online betting applications for misleading consumers by issuing surrogate advertisements and violating advertising norms. 39 • In February 2023, the MeitY blocked over 138 offshore betting platforms under Section 69A of the IT Act. 40
IPSITA AGARWALLA Associate
RAASHI VAISHYA Associate
GOWREE GOKHALE Lead , IP, Technology and Entertainment Law
35 See: https://g2g.news/gaming/offshore-betting-website-fairplay-bypasses-domain-blocking-by-changing-web- site-url/ 36 See: https://g2g.news/online-gaming-laws/tax-department-working-to-curb-income-tax-evasion-by-offshore- gaming-websites-tarun-bajaj-revenue-secretary/ 37 https://bestmediainfo.com/2022/12/all-india-gaming-federation-praises-mib-s-decision-to-bring-in-strict-advi- sories-against-offshore-gambling-ads 38 See: https://www.financialexpress.com/business/brandwagon-mib-issues-advisory-on-advertisement-of-on- line-betting-platforms-3036767/ 39 See: https://g2g.news/gaming/ccpa-invokes-provisions-under-the-consumer-protection-act-issues-notic- es-to-gambling-websites-for-surrogate-ads/ 40 See: https://inc42.com/buzz/india-bans-138-chinese-betting-apps-in-yet-another-digital-surgical-strike-heres- the-full-list/ 41 https://www.cnbctv18.com/technology/indias-online-gaming-market-dream11-my11circle-rummycircle-games- 24-7-ipl-mpl-16062901.htm 42 See: https://g2g.news/online-gaming-laws/aigf-files-writ-petition-in-high-court-against-new-online-gaming-law/ (last accessed on June 26, 2023).
TANISHA KHANNA Media, Entertainment and Gaming Lawyer, Nishith Desai and Associates For information contact
tanisha.khanna@ nishithdesai.com +91 2261595019
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IMGL MAGAZINE | JULY 2023
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