India Flags Dedicated Law For Online Gaming

February 13, 2023
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India’s information technology minister has confirmed the government’s commitment to passing an online gaming law, which would pave the way for formal national regulation with state government assent.

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India’s information technology (IT) minister has confirmed the government’s commitment to passing an online gaming law, which would pave the way for formal national regulation with state government assent.

Electronics and IT minister Ashwini Vaishnaw told the lower house of parliament on Wednesday (February 8) that regulation of online gaming and gambling should be enshrined in a dedicated law.

“We as responsible lawmakers should come [up] with a central act, which basically has been drafted in consultation with everybody, and that act should be effectively regulating the online games and online gambling,” he said.

Vaishnaw said the central government will pass a national law that works with state government policies and legislation on online gaming rather than override them, and that state governments will maintain their constitutional powers to legislate on gaming matters and enforce those laws.

But he expressed confidence that state governments will cooperate with the central government and its accelerating initiatives to regulate and develop the online gaming industry, inclusive of video games, esports and fantasy sports, as well as both skill and chance gaming with stakes.

“Already, 19 states and Union Territories [out of 36 entities] have passed their own [gaming] laws. Seventeen states have actually amended the Public Gambling Act 1867 and introduced the online gambling elements within the act,” he said.

Vaishnaw’s comments hint at strengthening the legal foundations that the online gaming industry has coveted for years, although a severe policy disjuncture between the central authorities and several gaming-hostile state governments remains.

They also came one week before the Supreme Court of India hears a critical appeal from the Karnataka and Tamil Nadu state governments that hopes to overturn High Court rulings in favour of online skill gaming with stakes and reinstate bans on all such activity.

That appeal is scheduled to begin tomorrow (February 14), with a third state government, Telangana, hoping to join the action in defence of its own ban on online gaming with stakes.

In other answers to various lawmakers on Wednesday, the IT ministry reiterated that online gaming operators will be classed as “online gaming intermediaries”, without the sense of the term “publishers”, under recently released draft rule amendments that include online gaming operations.

This qualification, which seemed to exclude protections for running third-party content and would be inconsistent with the legal definition of “intermediary”, could require online operators to exercise greater due diligence on the games they run and the transactions that customers make.

However, the government’s position on operator accountability for third-party content remains unclear, even after Vaishnaw’s statement.

“The question that remains unanswered is why we now bring online platforms within the purview of intermediaries, thereby giving them passage to ‘safe harbour protection’ under Section 79 of the IT Act,” said Ojasvi Agarwal, writing for law firm Fox Mandal on January 11.

After years of backroom government debate and pandemic-charged market growth, and amid growing litigation in state high courts across the nation, the central government has in recent months moved aggressively to provide online gaming with a national framework.

With the electronics and IT ministry (MeitY) serving as the industry’s central bureaucracy, this framework includes a commitment to regulating both skill and chance gaming with stakes and to admitting online gaming as a taxable enterprise, including customer winnings.

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