NEW DELHI: The states and the Centre are at loggerheads days after the latter notified online gaming.
Tamil Nadu became the first state to come up with an act that proposes a complete ban on online gambling.
Tamil Nadu governor R N Ravi, according to reports, on Monday, (April 10, 2023) gave his assent to a bill~ Prohibition of Online Gaming and Regulation of Online Games Act, 2022 that proposes a complete ban, and a fine of up to Rs. 5,000, or imprisonment of up to three months. The governor gave assent to the bill shortly after a resolution was passed in the House against him for witholding assent to several bills.
The governor had earlier rejected the Bill saying that the Tamil Nadu Assembly had “no legislative competence” to frame it.
Meanwhile, industry experts have little reservation about the faceoff as they believe the online games of skill are a constitutionally protected category that was always outside the state purview.
“Gambling or Games of Chance played for real money is a state subject. The inclusion of Online Game of Skill in the IT Act makes the Ministry of Information and Technology (Meity) the nodal ministry to build guard rails for the gaming companies which are anyway constitutionally protected to operate with responsibility and accountability. This also gives enough power to the center to deal with the menace of illegal offshore betting and gambling companies to protect the Indian consumers,” said Saumya Singh Rathore, co-founder, WinZO.
For online gaming, the government notified regulation that prohibits games that involve wagering or betting with real money. Also, in the gazette notification, the online game means a game that is offered on the Internet and is accessible by a user through a computer resource or an intermediary.
“The rationale of why a separate law is required at the state government level is not very clear and is likely to lead to confusion, unnecessary litigation and instability in policy making. It will also cause duplication of efforts for startups, which form a large part of the online gaming ecosystem. The mischief which Tamil Nadu has been trying to address and the consumer welfare that its law primarily has in mind has been incorporated in the online gaming law,” said Ranjana Adhikari, Partner, IndusLaw.
According to the law, online gaming would mandate establishing three self-regulatory organisations (SROs) that will approve games that comply with the rules for operation in the country. Also, they will have to verify the identity of online gamers. The purpose of introducing the rule is prevents self-harm or psychological harm from online gaming. According to a report, India accounted for 507 milion at the end of March 2022, with the homegrown online gaming market projected to grow to $8.6 Bn by FY27.