Desi Courts Point out Gaps in Online Gaming Legislation

India’s online gaming habits are an established social phenomenon. The lack of formal industry regulation holds back investment and taxation opportunities and frustrates players. State Courts have begun advising Governments to consider legislative action once and for all.

The Rising Importance of the Online Gaming Industry in India

For those who enjoy a roulette game online or indulge in a classic Rummy session with relatives, the skill gaming industry in India has been an indispensable companion for the past decade. The sector is experiencing rapid growth, driving innovation in technology and user experience. Notably, it has been facilitated by a much improved digital infrastructure, constantly evolving electronic transaction options and cheap data plans. Arguably, Centre’s Digital India initiative should also support and promote gaming development companies and operators all over Bharat.

 As Indian digital pioneers have proven their mettle in one of the leading markets for the gaming segment, public interest for formal legislation of the industry has been on the rise as well. Games of skill, however, are left largely unregulated in most States. The general legislative framework is based on the completely outdated 1867 Public Gambling Act. Recently, the Gujarat High Court has explicitly declared existing laws as inapplicable to online gaming, with the latter being irrelevant under “gaming house” definitions.

Courts in Kerala and Karnataka have also taken a similar stance, asking Governments to take the necessary legislation initiative. Current standards leave practically all online gambling completely unregulated allowing Indian consumers to play online roulette and other games of chance, mostly on offshore platforms like 10Cric, websites and mobile apps.

Missing Out on Investment, Jobs and Taxes 

The prevailing legal uncertainty causes some concerns for the vibrant Indian online gaming industry. Market opportunities are lost, and while investments are steadily growing, both local and international companies are hesitant with their strategic decisions and long-term plans. This translates not only in forgone business opportunities (with related upturn in local tech support jobs) but also in loss of potential taxation income which could be directed to crucial public services and programmes.

Several States have hinted at upcoming developments, as per recent reports. While educating the young public – possibly with that same taxation income – on the difference between fantasy sports, online poker and rummy and a casual roulette game online should also become an agenda item in the near future, establishing a healthy business climate for the digital industry must be an impending priority for both State and Central legislators.

Formal distinctions between games of skill and games of chance, definitions and rules for online gaming platforms and communities, regulation and taxation codes for those operating and earning in the sector – these are all necessary milestones in building a long-term framework for growth in this digital industry segment, as much as for guaranteeing the public interest and social wellbeing. Currently, by the looks of the legislative climate, discussions are still at an early stage and it could be some time before consistent regulation is introduced by authorities on a nation-wide scale.