Ongoing Tussle of Online Gaming Laws and the need to Revamp these Laws
Updated: May 12, 2022
- Sneh Gada
In this fast-moving world, the gaming industry in India has seen exponential growth as a result of advancements in technology and internet services. India is a developing nation with more than 500 million active internet users. Alongside, India has a majority of the youth population, which gave birth to the rising interest in online games. Amid the COVID-19 Pandemic, one’s movement was restricted to the four walls, due to which internet gaming was one of the means of entertainment that substantially dominated the profound interests of the growing youths of the nation.
According to KPMG India’s Media and Entertainment Report, India has more than 5 billion downloads, making it the highest number of mobile game downloads globally. The Indian Gaming Industry witnessed a collective market investment of about $530 million between 2014 and 2020. By the end of 2022, the overall market value of the online gaming industry is expected to rise by more than $2.8 billion. All these statistics shed light on how massively the gaming industry has developed over the years. With this advanced growth, there is also a point of concern that needs to be addressed. India has various laws, but there exists no uniform legal framework to regulate the nexus of online gaming. Hence, it is a matter of concern to redefine these laws to bring about a modern and effective law in action.
A Concern - Games of Skill vs. Games of Chance
The gaming industry is very huge, and its mechanism is based on the varied aspects of skill and chance. The present gaming laws are silent on laying proper guidelines for the same, and thus, it is imperative to understand the legality of online games involving an element of skill and differentiate between skill-based and chance-based gambling. A game of skill is any online game that involves a particular skill in the form of thinking, and analysis to achieve the desired result. Whereas, in a game of chance, the results are based on unpredictable factors such as luck, which determine the success of any particular game. This fine line of consideration was very well elucidated by the Supreme Court in the case of the State of Andhra Pradesh v. K. Satyanarayana, where a game of skill was recognized to be legal. It was also stated that games of skill involving monetary stakes are also exempted from the ambit of gambling, which is an actual game of chance. To state with an example, in the case of R.M.D. In Chamarbaugwala v. Union of India, the court had emphasized the fact that when the success of the game is determined by the skills of the player, it will not be considered gambling.
In the case of Varun Gumber v. Union Territory of Chandigarh and Ors, (popularly known as the Dream 11 Judgement), the Punjab High Court stated that in any game of skill, greater experience, and recurring training provide a player with prominent strategies to succeed in a game by developing a better understanding of the game dynamics. It was stated that any gaming activity involving the use of the substantial skill of a player is considered to be a legitimate business and is protected under Art. 19(1)(g) of the Indian Constitution, and thus Dream 11 was rightly conducting legitimate business activity. All these examples focus on targeting the need and the importance of tarnishing existing laws.
The Need for Uniform Legislation
In India, the online gaming industry is predominantly governed by state acts and laws. It is established under Entry 34 of the Seventh Schedule of the Indian Constitution, whereby the constitution grants power to the state legislature to govern the practice of gambling within its territory. This makes the state free to decide as to which games are to be immunized by law and which games are to be prohibited by law. It is pertinent to note that states in India, are making tremendous efforts to effectively regulate the practice of online gaming and gambling activity. The states of Meghalaya, Nagaland, and Sikkim have already issued specific legislation for online games. These state legislations lay out the criteria for determining which games are to be authorized by law. This is in accordance with the Games of Skill vs. Games of Chance test as explicitly stated above.
The 276th Law Commission of 2018, titled “Legal Framework: Gambling and Sports betting” had certainly emphasized revamping the scattered state laws and central acts into a single form of law that will help regulate the recognized practice of skill-based online games and prohibit games of chance involving monetary stakes. In furtherance of these actions, there are subsequent reformative action plans which were enforced to bring in a single effective course of action. The Sports (Online Gaming and Prevention of Fraud) Bill, 2018 was opined by Mr. Shashi Tharoor. This bill highlighted the need to bring in a uniform code of regulation to separate online games involving skills and monetary stakes apart from gambling. But, unfortunately, it didn't come into force as the parliament was dissolved before the elections. The NITI Aayog, in its Draft report titled, “Guiding Principles for the Uniform National-Level Regulation of Online Fantasy Sports Platforms in India”, advocated the establishment of a single regulation for online fantasy sports games.
All of these instances revolved around the same need to establish uniform legislation to protect the stakes of players and investors while also making it easier for the government to achieve its potential goal.
The Internet is all-pervasive and doesn’t have any kind of geographical boundaries; so, it is impossible for any state law to effectively regulate online gaming in India. This vicious circle of ambiguity makes it very hard at times for the government to tackle the increasing cases of fraud and other crimes arising out of online gaming, including stakes. Thus, in this ever-developing world of technology, a uniform legislature to regulate online gaming should be enacted that sets out proper guidelines for classification between a game of skill and a game of chance. It will help cater to the need to efficiently bring about a substantive plan of action that will result in a win-win situation, providing the gaming community with a guarded future ahead.
Sneh Gada is second year student at Pravin Gandhi College of Law, Mumbai.
 KPMG in India’s Media and Entertainment Report, 2020  State of Andhra Pradesh v. K. Satyanarayana, A.I.R. 1968 S.C. 825 (India).  R.M.D. In Chamarbaugwala v. Union of India, A.I.R. 1957 S.C. 628 (India).  Varun Gumber v. Union Territory of Chandigarh and Ors. The Dream 11 Case. Article titled The Skill Element in Fantasy Sports Games, published by The Sports Law & Policy Centre, Bengaluru  Law Commission of India, Report No. 276 titled ‘Legal Framework: Gambling and Sports Betting including in Cricket in India,’ 2018  The Sports (Online Gaming and Prevention of Fraud) Bill, 2018, Bill No. 259, Draft Act of Parliament, 2018