Introduction
In India, gaming/gambling is a subject governed by the State and not by the Centre. The Public Gambling Act, 1867, is the central enactment on the subject but various States in India have their own legislation to regulate gaming/gambling in India which differ from State to State. This would mean what is permitted in one State may be an offence in another. It is to be noted that most of the State Legislations pertaining to gaming have been enacted prior to the advent of virtual gaming/gambling attained popularity in India. In India playing games of skill for money is only legal in the real form but virtual games enticing players by offering them with prize money/gifts and attracting business are still considered either illegal or are not yet supported under any law in a specified manner even though many States in India allow the same.
Ordinance on 23rd September 2020 and it is named as “Andhra Pradesh (Amendment) Ordinance 2020\”. The State of Andhra Pradesh has recently vided notification dated 25th September, 2020 has amended the Andhra Pradesh Gaming Act 1974 to include online gaming, online gambling, and online betting as an offence by promulgating an Ordinance on 23rd September 2020 and it is named as “Andhra Pradesh (Amendment) Ordinance 2020\” (“amended Act”) as Andhra Pradesh Ordinance No.13 of 2020.
Significant Provisions of the amended Act:
The main objectives of the amended Act is to ban online gaming, online betting, and online gambling which involves real money, hence necessary provisions under the amended Act include the following:
-
Offences under the amended Act have been made cognizable and non-bailable. A cognizable offence is an offence where the police are empowered to investigate without prior permission or order from the jurisdictional magistrate and arrest without warrant. A non-bailable offence is an offence where bail has to be sought from the jurisdictional Courts.
-
Penalties for contravention have also increased.
-
Police have been granted wider powers of search, seizure, and investigation including the power to freeze bank accounts.
-
The managing directors of all the online gaming companies and those involved in the running of the company are liable for punishment under the Act.
-
Under the amended Act, those assisting the operation of online games are liable for punishment and the role of internet service providers can be termed as assisting these firms in case they do not take steps to block access of concerned websites and apps.
-
The savings and exceptions for ‘games of skill’ from the provisions of have been entirely done away with.
Earlier, the provisions of the original Act did not apply to a ‘game of skill’ and only playing a ‘game of chance’ for real money was prohibited.
Further Developments on the issue:
The State has urged the Centre vide letter dated 27th October 2020, to direct all internet service providers to block access to 132 websites and apps which include Mobile Premier League and Adda52 and many more that are providing such services in the state of Andhra Pradesh by providing a list of the same to the Centre[1].
Implementation of the law:
The amended Act was brought in operation with immediate effect by the State of Andhra Pradesh by a promulgation of the Ordinance pursuant to the extraordinary legislative powers of the Governor under Article 213 of the Constitution of India since the Andhra Pradesh State Legislature was not in session. However, when the session begins the Ordinance passed in respect of the amended Act will have to be presented before for the houses and both the houses of the legislature will have to pass the same within prescribed time with or without any further amendments otherwise the law will cease to exist and operate.
Critical Analysis
The Ordinance appears to conflict with the settled position of various real and virtual games also being classified as ‘games of skill’ and, therefore, falling outside the purview of the gambling laws. Inferences can be drawn from orders passed by various Courts in India while deciding the issue of whether a particular game is a ‘game of skill’ or a ‘game of chance’.
In State of Bombay v. R. M. D. Chamarbaugwala (1957 AIR 699)[2], the Supreme Court of India held that competitions (games) where success depends on a substantial degree of skill will not fall into the category of \’gambling\’ and despite there being an element of chance, if a game is predominantly a game of skill, it would nevertheless be a game of \”mere skill\”. Though this Judgment was passed at the time when gaming had not moved on the digital platform but the same did set a base for such matters pertaining to gaming in future.
The High Court of Punjab and Haryana held Dream 11\’s format of fantasy sport to be a game of skill in the case of Shri Varun Gumber v UT of Chandigarh & Ors[3]. Even the High Court of Bombay also recognised that the same format of fantasy sport was a game of skill in Gurdeep Singh Sachar v Union of India[4]. However, an appeal has been filed and this matter has moved to the Supreme Court and the decision is yet pending in the matter.
A review petition was filed against the order of the High Court of Kerala in the matter of Play Games 24×7 Pvt. Ltd v Ramachandran K & Anr[5]. However, the Court dismissed the petition and held that whether playing Rummy for stakes or not including on a virtual platform would amount to a violation of the Kerala Act would have to be seen on a case to case basis.
The issue of online gambling in Indian laws remains a grey area which is yet to be adjudicated by courts of India. On 28th December 2018, the Sports (Online Gaming and Prevention of Fraud) Bill, 2018, (“Sports Bill”) was introduced as a private member’s bill in the Lok Sabha[6]. The Sports Bill was introduced on the heels of the Law Commission’s report on legalizing betting and gambling in India. However, the Sports Bill lapsed with the dissolution of Parliament prior to general elections in 2019 and will need to be re-introduced in Parliament.
Very few States in India permit gaming by providing a license. Sikkim has enacted a statute pertaining to online gaming i.e. Sikkim Online Gaming (Regulation) Act, 2008 (\”Sikkim Gaming Act\”). Playing certain games including ‘Poker’, both online and offline, is permitted under the laws of West Bengal[7], Nagaland wherein an interested person can obtain a \”license\” for the purpose of conducting online games from concerned authorities.
The State of Telangana used to be a state together with Andhra Pradesh up until 2014. They operated under what was then called the Andhra Pradesh Gaming Act of 1974, but today, any gambling-related laws are dictated by the Telangana Gaming Act, 1974, prohibits all forms of games of chance and don’t differentiate between online and offline gambling. The act, nowadays better known under the most recent Telangana Gaming (Second Amendment) Act, 2017, clearly states that any location, “cyberspace” included, used to organize gambling, is illegal within state borders.
The central enactment of the Public Gambling Act, 1867 has been adopted by certain states of India like Uttar Pradesh, Punjab, Madhya Pradesh, etc but the same has not yet included virtual gaming.
There is concern over online gaming and online betting fast catching up as a severe social evil leading to youth getting involved in vices like gambling and betting from the comfort of their homes through their mobile phones and computers and have in certain cases led to suicides by youth and widespread despair amongst the masses due to losing money, severe addiction and consequent violent behaviour in case of any restriction parents or peers and also there is a possibility of online monetary frauds and money laundering being carried out under the disguise of virtual gaming as well as data privacy is another concern in a country like India where so far there are no stringent laws pertaining to data protection as a result of which a few months ago several Chinese apps were banned by the Centre.
Similar to the growth story of any industry, the e-gaming industry’s growth relies on the well-rounded development of the ecosystem. The industry is aiming to boost visibility and improve conversions, with gaming companies bidding for sponsorship rights of mainstream sporting leagues, such as the Indian Premier League (IPL). Dream11, who paid BCCI huge amounts to buy the title rights of IPL 2020, is using several Indian cricketers to advertise its fantasy app. There may be few other fantasy apps that are being endorsed by few other cricketers. Dream11 has respected the law and restricted access to consumers if they belong to any of the States that has banned virtual gaming to participate in their cash contests[8]. Also, most of the gaming platforms are start-ups that require proper nurturing. If provided with the right level of nurturing, the Indian virtual gaming industry has the potential to be seen as a global power to reckon with. The Central Government has recognised this industry’s importance therefore in the past few months many digital games inspired by the Indian culture have been encouraged to be developed[9].
The amended Act bans real money virtual gaming but is yet unclear on whether virtual gaming which does not involve real money can be permitted. While issues related to degradation of the quality of life and social fabric are serious challenges towards making any legalization of gaming/gambling activity for economic or even non-economic purposes by any State but the fact cannot be ignored that the youth population in India remains one of the attractive markets for virtual gaming. However, owing to a lack of progressive and stable regulatory policy framework in place, the gaming industry in India often faces legislative actions, government investigations, and/or lawsuits.
-Adv Vaidehi Harshad Samant
(Advocate, Mumbai)
[2] https://indiankanoon.org/doc/212098/
[3] https://www.casemine.com/judgement/in/596dd1ee4a93260b5a0444e0
[4] https://www.casemine.com/judgement/in/5de5f8554a93266a5d727693
LAWBEES 