Online gaming in India | Timeline

Mains Marathon – 17th Feb 22

Addiction: Numerous people are developing an addiction to online gaming. This is destroying lives and devastating families. Compulsive gaming by children is affecting their performance in schools and impacting their social lives & relationships with family members.

Impact on health: Gaming addictions can also be linked with anxiety, depression, obesity, sleeping disorders, and stress. People who remain physically inactive for long periods because of gaming may also be at higher risk of obesity, sleep disorders, and other health-related issues, according to WHO.

World Health Organization, in its International Classification of diseases 2019 data, expressed that online games are behaviorally addictive. Habitual gamers may suffer from various issues like blurred vision, stereotypical mindset, lack of physical exercise, etc. It may also expose them to sexual stereotypes and inappropriate conditioning of males. 

Cyber bullying: Although cyber bullying has countless forms, some forms are particular to gaming platforms, like hurtful and harmful messages, spamming global chat channels with derogatory comments about their victims. This has led to instances of suicide and self-harming behavior in victims.

Privacy concerns: The personal data shared by players on gaming platforms, especially by children, could be utilised to breach their privacy.

Economic costs: Wagering on online games is a menace where people have lost their hard-earned income, when their children knowing or unknowingly have bought expensive game features.

Cyber security: Hackers could use chat room games to trick players into clicking malicious links. They could also modify a legitimate app and upload the malicious version to Google Play or another legitimate marketplace thus infecting our devices.

It falls under the List II of the 7th Schedule of the constitution. Online gaming policies fall under the legislative jurisdiction of the state.Several states like UP, MP and Delhi have adopted the colonial era Public Gambling Act 1867. While others enacted legislation to regulate gaming and gambling activities within their territories under the gaming law.

Online gaming and its regulation in India – Explained, pointwise – 30th Dec 21

Games based on skills are allowed in most parts of the country, while games of chance are categorised under gambling, treated as immoral and prohibited in most parts of the country. As betting and gambling is a state subject, different states have their own legislation.

– Every state except Goa, Sikkim, and the UT of Daman prohibits any sort of gambling, betting or wagering on games of chance.

– Assam, Andhra Pradesh, Nagaland, Odisha, Tamil Nadu and Telangana have placed restrictions on games of skill as well.

But, recently, The Kerala High Court accepted the stance of Industry that games of skill should not trigger bans on gambling.

Amendments to Betting and gambling regulation in Karnataka: The Karnataka government had notified a law banning betting and wagering in online games in October 2021. This law has been struck down by the High Court. This judgment follows other positive judgements given by Hon’ble High Court’s of states such as Punjab & Haryana, Rajasthan, Bombay that recognised Fantasy Sports as games of skill and a legitimate business activity protected under Article 19(1)(g) of the Constitution of India.

The law was called a ‘public order’ law, but the Karnataka High Court has rejected this. The law also referred to “the menace of cyber games” and the registration of about 28,000 cases by the police in the State in the last three years.

Also, last year, the Madras High Court invalidated similar amendments that targeted online rummy and poker.

Why the High Court struck down the amendments brought to existing betting and gambling regulations in Karnataka?

“Gaming and banning: On ban on online games” – The Hindu on 16th Feb 2022

The High Courts of several States have struck down the ban on Online Gaming on three grounds: a) violation of fundamental rights of trade and commerce, b) liberty and privacy, c) speech and expression. Other reasons are:

One, the provisions of the laws failed to make a distinction between games of skill and games of chance and sought to bring under the proscription all games played online, regardless of the extent to which skill was required. It attempted to make all online gaming punishable, even if they involved skill.

Two, in both cases, the legislature assumed a paternalistic role with the aim of protecting the people, especially the youth, from the temptations of online gambling.

Three, the court has pointed out, if the objective was to curb the menace of gambling, the government should prohibit activities that amount to gambling and not the games of skill. The government did not consider the option of regulating betting on games of skill.

Four, the idea of betting and gambling have an element of ‘information, expression and entertainment’ that has constitutional protection. Gaming platforms are also legitimate businesses that enjoy the freedom of trade when used for online versions of games of skill.

Five, the ban has not targeted the gambling part but the ‘online’ part. Hence, it is clear that an absolute ban could not have been upheld by the court.

The High Court also relied upon previous judgements of the Supreme Court, which had held rummy, fantasy sports and betting on horse racing to be games of skill. The court held that games, where substantial effort, knowledge, and skills are required, are different from games of mere luck or chance.

“Regulation, not prohibition – on online skill gaming industry” – The Hindu – 23rd Feb 2022.

In the Chamarbaugwala case in the 1950s, SC held that in any game, if the element of skill is dominant over the element of chance, then it is a game of skill and cannot be construed as gambling. Several states argued that the case is outdated now, as technology has progressed significantly and most games are played online. But Karnataka High Court judgment negates the view that the judgment needs a relook, as it has been reaffirmed by a series of Supreme Court and High Court decisions since then.

Various High courts have legitimized gaming formats like fantasy sports etc as online games of skill.

Online gaming and its regulation in India – Explained, pointwise – 30th Dec 21

Rulings like, Gurdeep Singh Sachar vs Union of India (Bombay High Court) and Avinash Mehrotra vs Rajasthan (Supreme Court) – have found fantasy sports of a predominant format to be games of skill.

Public Prosecutor vs Vraj Lal Sheth: Madras High Court ruled that whereas gaming involves skills, betting involve losing or winning solely depending on the occurrence of an uncertain event. 

Shri Varun Gamber Vs Union Territory of Chandigarh: Court ruled that playing significant games like Dream 11 required a significant degree of skill and so not constitute gambling. 

Junglee games vs State of Tamil Nadu: High Court ruled that games of skills can be played online for stakes and cannot be categorized as betting or gambling. 

“Regulation, not prohibition – on online skill gaming industry” – The Hindu – 23rd Feb 2022

Gaming is the sunrise sector that has immense investment and revenue-generating potential. The sector currently employs 40,000 people. It also received massive foreign investment. In the last five years, the online gaming sector has received around $1,700 million in venture capital and private equity.

So, instead of banning the games, State governments should introduce a reform-oriented policy structure based on checks and balances.

“The case for clarity over India’s policy on online betting” – Livemint – 18th Feb 2022
India is lacking in the laws governing online games. There is need to adopt appropriate regulatory norms that involve age verification mechanisms, parental control and risk flagging system.

As the world is getting digitized, Law Commission of India advised government to adopt a comprehensive legislative framework which can satisfy the present demands of the society.

“Questioning the ban on online gaming platforms” – The Hindu – 17th Feb 2022

An outright ban may not entirely curtail the playing of such online games. Instead, the users will shift to grey or illegal offshore online gaming apps.

This not only results in loss of tax revenue for the State and job opportunities for locals, but results in users being unable to avail remedies for any unfair behaviour or refusal to pay out winnings.

Hence, instead of a complete ban, the state could look at licensing and regulating the industry with various checks and balances.

Mains Marathon – 17th Feb 22

Regulating gaming hours: The government can regulate the online gaming hours especially for Children. For instance, recently, China limited gamers under 18 years to just three hours of online games per week. This could be used as a guide for Indian context.

Age-Rating mechanism: Each game should follow a well-established age-rating mechanism and minors should be allowed to proceed only with the consent of their parents OTP verification on Aadhaar could potentially resolve this.

Consent for in game purchases: No in-game purchases should be allowed without adult consent and wherever possible, the in-game chat option should be disabled.

User education and Awareness: The government and Gaming companies should proactively educate users about potential risks and how to identify likely situations of cheating and abuse.

Grievance redressal: Gaming companies should remove the anonymity of participants and build a robust grievance handling mechanism.

Central Gaming Authority: A Gaming Authority at the central government should be created while various forms of self-regulation are encouraged for the industry. This authority could be made responsible for the online gaming industry, monitoring its operations, preventing societal issues, suitably classifying games of skill or chance, overseeing consumer protection, and combatting illegality and crime.