INDIA MARKET UPDATE
central level. 8 This amendment did not replace the existing State Gaming Enactments but created an independent framework for online gaming. The amendment sought to establish a light-touch, co-regulatory framework between the Ministry of Electronics, Information and Technology (“MeitY”) and designated self-regulatory bodies (“SRB”). Co-regulation through SRBs was consistent with the goals of eliminating prescriptive regulations and for improving the ease of doing business in India. The amendments focused on the regulation of two categories of games – (i) permissible online real money games (“PORMG”), and (ii) other online games. Online gaming intermediaries (“OGI”) offering PORMG would be regulated by designated SRBs. Verification of a game as a PORMG would be the responsibility of the SRB, subject to certain conditions, including that the game does not involve wagering on any outcome. 9 Hence, games like sports betting were sought to be excluded. Three SRBs applied for designation, however, as per news reports the anticipated co-regulatory framework for online gaming through SRBs has been scrapped by MeitY. 10 This was reportedly done amidst concerns that the SRB may be heavily influenced by major industry players, and hence lack independence. Reports suggest that there may be an independent regulator set up for the gaming industry for registration of online games, and only registered entities be permitted to offer gaming services in India. 11
consultations with industry stakeholders. These multi-part round table discussions are being spearheaded by an Indian university, the National Law University Delhi (“NLUD”) and E-Gaming Federation (“EGF”), one of the industry bodies that had applied for designation. 12 Supreme Court to consider whether bans on skill games are constitutional The SC has held that offering and playing games of skill are constitutionally protected activities. 13 Amendments 14 introduced by the state of Tamil Nadu to the Tamil Nadu Gaming Act, 1930 (“TN Act”) prohibited all forms of online games of “ mere skill” if the games were played for a “ wager, bet, money or other stake ”. 15 In the matter of Junglee Games India Pvt. Ltd. & Anr. v The State of Tamil Nadu & Ors , 16 this amendment was challenged as unconstitutional before the Madras High Court. The court struck down the amendment as unconstitutional. An appeal against this judgement has been filed by the State Government of Tamil Nadu before the SC and is currently pending. 17 Thereafter, and pending the SC challenge, the Tamil Nadu Prohibition of Online Gambling and Regulation of Online Games Act, 2022 (“TNOGA”) was enacted by the State Government of Tamil Nadu to prohibit the offering, playing and advertising of games of chance with stakes. TNOGA provided for a specific definition of the term “online game of chance” . 18 Games like
It has been reported that there are ongoing collaborative
8 See https://www.meity.gov.in/writereaddata/files/Draft%20notification%20for%20amendment%20to%20IT%20Rules%202021%20for%20 Online%20Gaming.pdf 9 See https://pib.gov.in/PressReleaseIframePage.aspx?PRID=1918383 10 See https://indianexpress.com/article/india/meity-to-prepare-guidelines-soon-proposals-for-industry-body-rejected-centre-to-regulate-e-gam- ing-9156525/ 11 See https://economictimes.indiatimes.com/tech/technology/govt-plans-independent-regulator-for-online-gaming/articleshow/108754450.cms 12 See https://economictimes.indiatimes.com/tech/technology/govt-plans-independent-regulator-for-online-gaming/articleshow/108754450.cms 13 RMD Chamarbaugwala v Union of India, [1957] 1 SCR 930. 14 Tamil Nadu Gaming and Police Laws (Amendment) Act, 2021. 15 Section 8, Tamil Nadu Gaming and Police Laws (Amendment) Act, 2021. 16 2021 SCC OnLine Mad 2762 17 The State of Tamil Nadu v. Junglee Games India Private Limited [SLP(C) No. 019981 - 019988/2021, SC]. 18 Section 2(l), TNOGA - “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 outcome or event generator;”
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IMGL MAGAZINE | SEPTEMBER 2024
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