How online gambling gets stuck between an international sporting event and state laws

In 2018, Esports was first introduced at the Asian Games in Jakarta.

By Shivani Jha

Online gambling is an emerging industry in India, even more so last year due to lockdowns caused by the pandemic. Deloitte India, in its report published in January 2021, presented that the Indian gaming industry is expected to reach $ 2.8 billion by 2022.

This nascent sector has led to many regulatory hurdles that have been overcome in recent years by states and their laws, the most recent being Karnataka. The Karnataka Police Bill (Amendment) to ban online gambling was approved by the cabinet on September 4, 2021. The bill has yet to be introduced to the state legislature during monsoon session, from September 13, 2021. The ruling is the result of an order of the High Court in the M / s Sharada DR case against the State of Karnataka dated March 31, 2021 in WP 16062 / 2020 ordering the state to rule on online gambling.

According to publicly available resources, the Karnataka bill would have defined online “gambling” as “involving all forms of betting or betting, including in the form of tokens valued in terms of money paid before or after. their issue, or in electronic form. means and virtual currency, electronic transfer of funds within the framework of any game of chance.

If this definition were to be incorporated, defining online “games” as betting does not seem to be the intention or an intelligible step given that in the past such laws have had to be the subject of legal challenges.

Gambling laws in Karnataka are governed by the Karnataka Police Act, 1963 for the Prevention of Gambling. By its 1974 amendment, Karnataka legalized betting and betting on horse races held at any location. what racetrack in or out of state. In 2013, the Karnataka High Court in the Indian Poker Association case against the State of Karnataka issued an order authorizing the management of poker clubs with registered members for recreational purposes.

History of state-level gambling laws

Earlier in 1995, the Supreme Court, in MJ Sivani & Ors v State of Karnataka & Ors, stated that “the regulation of video games or the prohibition of certain video games of pure chance or chance and mixed skills do not violate section 21. Nor is the procedure unreasonable, unfair or unfair. He also defined the game by stating, “Gambling is all about playing any game, whether it is skill or luck for money or for money and the act of doing nothing. it is no less a game because the game played is not in itself illegal and whether or not it involved skills “

Sikkim and Nagaland are the two states that have passed legislation to allow and regulate online gambling. Sikkim’s Online Gaming (Regulation) Act 2008 was passed to legalize and regulate online gaming on electronic and non-electronic portals. The law was subsequently amended in 2015, limiting the offer of “online games and sports games” to physical premises located within the geographic limits of Sikkim. Nagaland, through the Nagaland Online Gambling Ban and Promotion and Regulatory Act of 2015, recognized “fantasy league games” as games of skill by the through licensing and regulates chess, sudoku, rummy, among others.

Part II of the Tamil Nadu Gaming and Police Act 2021 (Amendment) introduced by the law of Tamil Nadu prohibits betting and betting in cyberspace, as well as games of skill if played for a bet, a bet, money or other stakes. The amended law was challenged in the Madras High Court in Junglee Games India Private Limited and Anr v. State of Tamil Nadu. Deeming it unconstitutional in its entirety, the Court struck down Part II of the Amendment Act. The Court stated that “by imposing a broad general ban, the state has completely failed to meet the ‘least intrusive’ measure and, therefore, the impugned amendment violates Article 19 ( 1) (g) of the Constitution. “

Esports in Asian games

In 2018, Esports was introduced to the Asian Games for the very first time in Jakarta, however, limited to being a demonstration sport, meaning that medals won were not counted in the official overall medal tally. On September 8, the Olympic Council of Asia recognized esports as a medal-winning event, as well as two demonstration games at the 19th Asian Games in Hangzhou, China in September 2022. The eight games and their publishers are Arena of Valor Asian Games Version, Dota 2, Dream Three Kingdoms 2, EA SPORTS FIFA branded football games, HearthStone, League of Legends, PUBG Mobile Asian Games Version, Street Fighter. The two demonstration events are AESF Robot Masters and AESF VR Sports; both powered by Migu.

Go forward

While on the one hand, international sporting events recognize the need to include Esports as medal-winning events, be it the Asian Games or the virtual Olympic series in 2020 and a likely feature of the 2024 Olympics as well, one after another, various state governments in India have implemented general bans on online gambling. These bans look at all kinds of online gaming from the same perspective, whether it’s online gambling or online skill-based games.

Such a view was strongly discouraged by the Madras High Court when removing Part II of the Tamil Nadu Gaming and Police Act 2021 (Amendment), the Court specifically said that when the outcome of a game that is not under the control of such a game cannot be considered a game and that blanket online gambling bans are not an approach that regulators wish to take.

Regulators need to take these issues and challenges into account when developing and formulating policies in this regard. With the worldwide recognition that this sector is obtaining, it continues to affect three categories of participants in the esports sector: gamers, developers and investors. Clear regulation can only be beneficial and fair to all, and it is hoped that other states will follow suit.

(The author is a technology policy researcher and legal officer at the Esports Players Welfare Association (EPWA). Opinions expressed are personal and do not reflect the official position or policy of Financial Express Online.)

Read also: Internet is the most consumed medium after television in rural India: report

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