By Himanshu Singh*

Introduction

“The House of Commons starts its proceedings with a prayer. The chaplain looks at the assembled members with their varied intelligence and then prays for the country.” This expression by Lord Denning extolls the virtues of democracy and mocks them at the same time in reference to the hefty potential and repercussions of the actions, of such members in the exercise of their legislative duties.

On April 1, 2022, Adv. Dean Kuriakose, M.P., introduced the Online Gaming (Regulation) Bill, 2022 (hereinafter referred to as “Bill”) in Lok Sabha in order “to establish an effective regime to regulate online gaming industry to prevent fraud and misuse.” The recent pandemic has been a root of many contortions in the life of generality and one such is the sharply increased consumption of digital sources of entertainment, leading to addiction, which also includes online gaming. Hence, the bill to regulate the unregulated industry till now, acknowledging the addictive and profound effects of the same.

The very advent of the gaming industry in the country could be traced back to the early 2000s where the same was nothing but only frowned upon. The viewpoint has changed colossally since then. It has been pointed out that the nation now has around 420 million active users/players on various platforms of the kind where the current valuation goes around upto one billion dollars and is expected to grow by another four before 2025.

Given the overwhelming numbers of the industry and its fate on operative parlance, the potential to leverage unsurmountable economic gains and advances and the prospect of putting up the country as a global front runner can be appreciated but so should be the need of these robust regulations, surely and eminently.

The fabric of the bill is divided into three chapters, wherein the preliminary chapter mainly includes the definitions related therewith while the second chapter consists of the constitution for the regulatory commission, proposed as the Online Gaming Commission (“OGC”), rulemaking powers of the same and other provisions corresponding to the maintenance of accounts, nature of offences and other headings so connected. The third chapter covers the miscellaneous provisions of the bill.

The Foreground Of The Bill

The definition provided for “Online Gaming” under the bill includes “any game played on an electronic device which may include personal computers, mobile phones, tablets, and other similar devices.” Provided that, there being no specification imparted in the definition, it is perceptible that it includes all forms of online gaming under its ambit, irrespective of whether it is a “game of chance” or “game of skill.”

Further, the Online Gaming Commission, as mentioned earlier, which the bill seeks to constitute, as per the constitution provided shall comprise of five members nominated by the Central Government, with at least one expert from the fields of law, law enforcement and cyber technology. The commission will be empowered to perform supervisory functions which inter alia includes over-seeing the conduct of online gaming websites, making frequent reports on related matters pertaining to online gaming and providing suggestions to better curb the illegality around the industry. Moreover, the licensing regime of the bill authorizes the commission to grant, revoke or suspend the license for websites hosting online gaming. Additionally, it also forbids any outfit or entity (other than those providing backend services to international gaming websites based outside of the country)from operating an online gaming website or server without a license and makes it a punishable offence, if done otherwise. Any entity/website caught running without the authorized license will be punished with three years’ imprisonment along with the requisite fine.

The commission will also hold the power to formulate rules relating to various aspects such as the manner of keeping accounts, organization of online games and regulations regarding participation in online games using a proxy, among many others. It would also be able to request the police to investigate any acts or omissions of violations of the provisions/sections under this bill.

Shortcomings Of The Bill

The closest this nation has ever come to any laws related to gaming was with the Public Gaming Act of 1867 where provisions for keeping gaming houses and against public gambling were provided for certain regions which included the then Central Provinces, United Provinces, Delhi, and East Punjab.

Currently, the Constitution of India, for the present regime, vide Entry 34, List II, concedes the states with the power to legislate on conventional gaming such as those of betting and gambling, making these laws a variable across the country. While some states have put an absolute ban on “games of chance” be it online or conventional brick or mortar, in the remaining states, it is heavily regulated.

In re Manoranjithan Manamyil Mandram v. State of Tamil Nadu, the Court held that whether a game is considered one of chance or skill, is a question of fact which should be determined based on the facts and circumstances of every individual case and in the case of RMD Chamarbaugwala v. Union of India, the Supreme Court recognized that organizing or exhibiting a game of skill is a sheltered activity under Article 19(1)(g) of the Indian Constitution, which guarantees the “freedom to practice any profession, or to carry on any occupation, trade or business.”

Subsequently, in the case of Dr. K.R. Lakshman v State of Tamil Nadu, the apex court was of the opinion that where a test of predominance of skill is applied as set out to validate the nature of the game and where skill was the predominant factor the activity, then it would be protected by Article 19(1)(g) of the Constitution as a permitted business activity. The case was in regard to the practice of racing horses and betting over the same. The court favored the practice as it observed that horseracing was “a game of skill not dependent on mere chance or accident but determined by many factors, such as the pedigree of the animal, the training given to it as well as the rider, its current form, the nature of the race, etc.”

The combined objective of the cases mentioned hereinabove is to highlight the lack of specifics and the legislative void in the bill in reference to other state laws concerning the gaming industry. The vague definition of “Online Gaming” under the bill fails to make a distinction between, firstly, a game of skill and a game of chance and secondly, between a real money game and a casual online game, which makes the bill seem highly regressive in nature. An online based casino and a casual online game with in-game purchases should not be regulated under the same laws, for more than obvious reasons.

Additionally, the bill intends to establish a unified supervisory agency/body under the administration of the Central Government which would be empowered to regulate and make rules around the online gaming industry. There certainly wouldn’t have been a predicament, if the “state-subjects” of betting and gambling were not involved. Although, under Article 249 of the Constitution, the Central Government could legislate matters on the state list in the interest of the nation, but in the particular circumstance, it would be uncalled for and will only bring added confusion and uncertainty. Further, a trivial point is that the bill doesn’t conform to the existing licensing regime and regulating laws passed by some of the states, which would need to be moderated in order to bring more lucidity to the related legislations. 

The bill also lacks the address of germane and impeding issues like grievance redressal, responsible gambling practices, and data and privacy protection to say the least.

What Could Be Done?

The latest bill, as discussed hereinabove, is surely mute on several factors which build up the mentioned issues and other societal and mental affairs. Addressing them is indispensable because the gaming industry in the country is only on a sharp-rapid ascent. A vigorous and sturdy regulatory system which could actually accentuate to display promise and curb illegal activities while helping businesses scale swiftly might surely be able to help.

There is also a view which suggests that to sustain their existence, the gaming companies might take an initiative and espouse self-regulatory measures and presciently educate the general user base on responsible gaming/gambling practices and protection from cheating, abuse, and misconducts over internet, among several things. To add, every game, whether skill based or not, must necessarily follow a well-entrenched age-rating mechanism which would at least restrict the juveniles, the children, and early teenagers from accessing the gambling/in-app purchasing attributes of the game. While the viewpoint surely seems prudent and astute, it may fail to instill confidence, credibility and maintain uniformity. To enshrine greater acceptability and conformity, in the present setting, the institution of a commission under a nodal ministry and housing regulations under the same seems nothing but fair.

However, even while creating a commission under the control of the federal government is a positive start toward unifying the online gaming sector, the current legislation by various states has to be tempered, and the bill itself needs to be more lucid. For instance, in United States of America, gambling is legal under the federal law and where the country’s Gambling Control Board (GCB), a federal government organization, is in charge of creating the rules that govern the gaming industry there. It has established a number of strict regulations, in view of the location of the various states and other conditions a gaming business must meet in order to be granted a license but nonetheless, every individual state still gets a say in the matter as they maintain their right to regulate the practice within their borders.

Moreover, the bill could refer to the licensing regime of some states in India or foreign countries such as the United Kingdom, which has established the License Conditions and Codes of Practice. It has laid down several requirements that the licensees must comply with in order to obtain a license.

The divisive nature of the act, the blanket regulations, the uncertainty which surrounds its jurisdiction and its constitutionality concerning the regulation of the state-matters, are some of the factors upon which the legislators should have an in-depth discussion during the sessions so as to further solicit for the changes for a more appropriate and comprehensive framework. 

Epilogue

India serves as a young and one of the most dynamic and progressive markets in the world. The potential it offers spreads across over almost every sector which fairly includes the persistent gaming industry as well. To facilitate its growth, there should be uniformity in the laws and around the system to rightly curb the illegalities and to safeguard everyone’s rights. Moreover, it is not the first time that such legislation aimed at regulating the online gaming industry and dealing with the matters connected therewith, has been proposed in the parliament. Dr. Shashi Tharoor, M.P., had previously presented a similar private bill, named the Sports (Online Gaming and Prevention of Fraud) Bill, 2018 which was robust and moderately more comprehensive as it covered under its ambit betting and sports fraud too. However, the bill lapsed with the dissolution of the parliament before the general elections of 2019 and wasn’t reintroduced thereafter. The current bill carries the same impressions as the previous one but is defeated on the points of specifics.

*Himanshu Singh is a 4^th year law student at University of Lucknow.