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The northern state of Uttarakhand has become the latest jurisdiction in India to signal support for online skill gaming with stakes, building regional momentum for national industry gentrification ahead of critical Supreme Court rulings.
The government is preparing a Gaming Act that will modernise the state’s regulation of the industry, the Hindi-language Jagran daily reported on Wednesday (April 30), likely codifying real-money gaming in the online space.
The report said the draft law, which is set to be vetted by the Himalayan state's legal experts, will distinguish between gaming and gambling, almost certainly referring to the legal distinction between skill- and chance-based games.
Unnamed sources told Jagran that the legislation will maintain sports betting’s status as a gambling activity.
But they did not elaborate on the status for skill-based games such as rummy, poker, e-games and fantasy sports, suggesting the draft will abide by Supreme Court precedent and not deviate from the direction of key states embracing regulation of online real-money gaming.
These key states are Maharashtra, the second or third-largest state by population, depending on population estimates, and information technology and start-up hub Karnataka, where gaming industry investment is at a premium.
The flurry of activity in state governments favouring real-money gaming follows years of setbacks for the industry, both in favourable states like Meghalaya, where public opinion forced the government to withdraw highly progressive legislation, and in hostile states like Tamil Nadu, where lawmakers want nothing to do with real-money gaming.
In part, the modernisation of gaming law follows requests from the central government to the states in recent years to update core anti-gambling legislation dating to the advent of the British colonial era in the mid-19th century.
But leading states now also seem to be electing a middle road in view of firm Supreme Court and state High Court support for online skill gaming with stakes, and in view of the federal tax system’s acknowledgement that online gaming revenue is a cash cow, albeit at a maximum tax rate that continues to punish smaller operators.
Karnataka has emerged as a bridge jurisdiction between old hostilities and modern compromise, announcing last month a full reversal on its hostile stance to online skill gaming, citing tax revenue, 150,000 jobs and the industry’s allure as an investment target.
The Supreme Court, meanwhile, is continuing hearings this month on two cases that are set to entrench industry guardrails for the foreseeable future.
One case on tax applicability has taken on industry and government defendants and appellants across multiple states, and could lower or remove goods and services tax (GST) obligations or constrain government methods of tax calculation.
In the second case, the court will settle the legality of real-money online skill gaming once and for all, potentially placing pressure on gaming-hostile states to relent and revise complete gaming bans.
