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A private member’s bill has been introduced to the Indian parliament to regulate the online gaming industry, amplifying the possibility of national intervention in the policies and laws of state governments.
Dean Kuriakose, a lower house member representing Kerala state, signed the Online Gaming (Regulation) Bill 2022 on February 4 and introduced it to the house on April 1.
The bill would form a seven-member online gaming commission that oversees the “functioning” of gaming websites, reports to the central government on online gaming matters, draws up measures that would “control or curb” illegal operations and control licensing and fees for the industry.
The bill also restricts online gaming to website operations and provides for a maximum of three years in jail for persons who operate such websites and related servers without a licence.
In a statement accompanying the bill, Kuriakose said “the gaming industry has such a profound impact on the nation [that] it is necessary that it should be regulated”, partly because “long hours of gaming … can impair normal socialisation, can cause physical and mental harm and even monetary loss”.
However, the statement confirms that the bill, as drafted, does not distinguish between online gaming with and without stakes, or between chance-based and skill-based online gaming.
Instead, the bill seeks to impose protective measures across the board, with “limitations like the amount of time one can play [and] maximum money that could be spent by one person”.
The “Online Gaming Commission will be in a position to regulate the industry by setting standards accordingly”, he concluded.
Legal experts have been quick to downplay any likelihood of the bill’s passage, noting that it does not address the small number of existing state government online gaming regimes, nor the wider problem of gaming matters being constitutionally delegated to state legislatures.
This is in addition to the text avoiding both the legally sensitive separation of skill and chance gaming and regulatory and market differences between online gaming with and without stakes.
Surbhi Kejriwal, Kevin Shah and Gaurang Mansinghka with the law firm Khaitan & Co, writing in the Lexology newsletter on Monday (April 11), wrote that the “scanty” bill fails to recognise that “the need of the hour is to have a regulatory framework for real money gaming and not casual gaming, which is already governed by various other legislations”.
“The bill also fails to address certain impending issues like know your customer (KYC) norms, customer grievance mechanisms, data protection of the users and other societal issues.
“It remains to be seen whether there is enough political will to take this bill forward.”
The lawyers noted that a similar, “more robust”, bill covering sports fraud and sports betting was introduced in late 2018, but lapsed ahead of election season in 2019.
“A robust regulatory and legal environment, devoid of uncertainties, is the need of the hour for this sunrise industry to achieve its true potential and ensure that the business can scale quickly,” they wrote.
The brevity of the latest bill, at only five pages, hints that its purpose may be as much political as it is legislative, especially in light of central government consideration of national regulation of fantasy sports, or at least guidance to state governments in this regard.
Possibly in this regard, one standout clause of the bill legalises foreign direct investment (FDI) in online gaming, “including technological collaboration”, a reversal of government policy that would dramatically reframe the investment environment for the proliferating industry.
