Gaming is an indispensable part of human life. From handheld games to online games, the gaming industry in India has witnessed a radical transformation. As the entire world is hit by the Pandemic resulting in shrinking space for physical sports, work, classes, the online gaming industry is likely to expand.
According to a recent report released by IndiaTech1 Indian fantasy sports platforms’ userbase jumped from 20 lakhs in 2016 to 9 Cr in 2019, such huge being expansion, do we have competent laws in place to deal with the rapidly growing online gaming industry? This will be pondered over in the latter part of this article, but it would be pertinent to distinguish between gaming and gambling at this juncture.
Black’s Law Dictionary defines gambling or gaming as “the act of risking something of value for a chance to win a prize”, Gaming and gambling are very often used interchangeably but there lies a slight distinction between the two.
The skill and chance factor cull out the distinction between the two terms. When skill preponderates chance it is considered gaming but when the result of a game is purely based on chance or chance preponderates, it is considered gambling.
LEGISLATION ON GAMING LAWS IN INDIA
India has been following the Provincial Act for governing gambling in its territory. The Central Legislation regulating gaming laws in India is “Public Gambling Act 1867 “. The preamble of the act states “Whereas it is expedient to make provision for the punishment of public gambling and the keeping of common gaming-houses”, the legislation through its preamble made it clear that it strictly condemns and prohibits gambling activities.
However, the legislation nowhere defines the term “ gambling” and neither it sets any illustrative list of activities that would fall within the ambit of gambling, it only provides an exception under section 12 which exempts activities involving “mere skill” out of the purview of the act. Again the act itself nowhere defines the term “mere skill”. The interpretation was given by the court in case of K.R. Lakshmanan v. State of T.N2,
Wherein the Honorable Court held “The expression “mere skill” would mean substantial degree or preponderance of skill”. This interpretation has been used widely used while determining the legality of multiple games including horse racing and poker.
The same principle is being followed in India for over a century, but the environment and manner in which gaming activities are carried out today have changed significantly in light of the advancement of technology. The Public Gambling Act being a provincial act enacted 150 odd years back makes no specific provision for the regulation of online gambling, neither it states any illustrative list of activities that would be called gambling. The only way to recognize an activity as gambling is whether the result of the game depends on a substantial degree of skill or chance if the result is based on chance or preponderance of chance it falls within the ambit of the act.
Gaming being a state subject under entry 34 of the Seventh Schedule of the Indian Constitution that empowers the State Governments to legislate on “betting and gambling”. It is a State Subject, India has laws which differ from State to State. Therefore, what is permitted in one State, may be an offense in another. Most of the states have been following central legislation with few amendments, some have enacted their own laws.
Sikkim is among the few states to give legal recognition to online gaming in its territory by enacting “Sikkim online regulation act 2008”. Sec2(d) of the said act recognizes online games and also states an illustrative list of games that may fall within the purview of online games.
Nagaland has also regulated online gaming through “The Nagaland Prohibition of Gambling and Promotion and Regulation of Online Games of Skill Act, 2016”, the act explains in detail what is a game of skill and also sets out an illustrative list of games in schedules a which are held to be game of skill. It has excluded the staking of money on games of skill from the ambit of gambling., a license has to be obtained for conducting such games, within it’s boundaries.
Position of fantasy games in India
Presently, the fantasy games like Dream11 are considered to be a game of skill and hence are held falling within Sec 12 of the Public Gambling Act that excludes game of mere skill. The Honourable Punjab and Haryana high court in the case Varun Gumber v. Union Territory of Chandigarh3 has held fantasy sports Dream11 to be falling within the ambit of Section 12 of Public Gambling Act. The Honorable Court held “the result of the fantasy game contest is not at all dependent on winning or losing of any particular team in the real-world game. Therefore, no betting or gambling is involved in the fantasy game”.
That being the position, fantasy games are given protection under Article 19(1)(g) of the Indian Constitution.
Now without commenting on what Honorable courts have held so far, let’s take a look at how these gaming websites promote themselves, while advertising on television a participant is displayed and it is claimed that the participant has won millions of rupees by using the particular app, the companies itself very decisively does not mention or nor intents to mention that winning in the game requires some skill, rather they lure people into playing the game by showing participants have earned quick bug by using the app in a very short span of time.
This may be termed as a business strategy but the companies must themselves refrain from projecting that making easy money is possible even if participants do not have any special skill.
Although the matter is still pending before the Honourable Supreme Court, whether it decides it to be gambling or not, one thing is clear that the current legal regime for gaming needs a relook to fit with changing time.
What may be the way forward?
The legislation in the UK can be of immense guidance in this regard. The UK, unlike India, instead of banning gambling activities, enacted gambling act 2005 to regulate gambling, the objects clause of the said act sets out three objectives.
Firstly, preventing gambling from being a source of crime or disorder. Secondly, ensuring that gambling is conducted in a fair and open way, and Lastly protecting children and other vulnerable persons from being harmed or exploited by gambling.
The Gambling Act 2005 also sets out an exhaustive definition of what constitutes gambling. the UK act also recognizes online gambling and regulates it.
UK does not ban gambling rather it provides a regulatory regime for better functioning. while generating revenue by licensing, it also ensures the safety of children by setting the age limit for participants.
Conclusion
The present gaming regime suffers from multiple lacunas it leaves multiple grey areas by not elaborately defining few terms and by not recognizing online gaming. The legislation dealing with gambling is too old in India.
Although states have the power to amend the legislation for their own territory but there is a need to either amend the existing legislation or to enact new central legislation to deal with the rapidly growing online gaming market in line with UK legislation. A systematic regulation is required, which in turn can bring huge revenue for govt through licensing, This will also ensure safety for the vulnerable section of society from falling prey to such gaming activities by formulating elaborated guidelines on who can participate in these games. The exigency is to set up a regulatory body to monitor and regulate the online gaming activities in India as the self-governing body like FIFS may not meet the need.
References
- Available at;https://www.indiatech.org/wp-content/uploads/2020/09/IndiaTech.org-Whitepaper-OnlineFantasySports-compressed.pdf
- K.R. Lakshmanan v. State of T.N., (1996) 2 SCC 226
- Varun Gumber v . Union Territory of Chandigarh and Others 2017 Cri LJ 3827
