States And Judiciary Lock Horns In The Online Gaming Dispute

Taking a stance in linking online gambling with public interest and law and order, the Government stressed on a direct correlation between the crime rate in the State and easy money and related incidents arising out of the psychological impact of betting and gambling in online games.

‘Chance pe Dance’

From last year’s amendment to the Karnataka Police Act, 1963, to the current contentious issue wherein the Apex Court must comment on the appeal, two golden words central to the entire debate are “skill” and “chance”. The amendment removed any distinction between skill and chance-based online gambling platforms, bringing the startup world of online gambling players under its whip.

It is ironic that the words ‘skill and chance’ have been beaten to death for this perspective and usage. It would have been more pragmatic to concentrate on differentiating games based on mere gaming and the thin line they cross when they foray into the gambling arena.
The exciting threads of discussions inside and outside the court, where the entire skill-based gaming world has been disturbed by the way it was perceived as chance-based, have triggered the current gambling satire. However, the Karnataka Judgment has clearly emphasized the constitutionality aspect by letting gaming service providers continue to operate their legitimate business while, at the same time, not hindering the legislation of new law in consonance with the Constitution against gambling.

Constitutional Chimes
Gambling remains within the purview of the State’s responsibility in India, empowering States with the primary authority to regulate and legislate on the acts of gambling in any manner they deem fit. The Public Gambling Act, 1867 (“Act”), which has been the only Act notified by the Central Government, is a century-old Act that is out of sync with the thrust of the online gaming industry today. States mostly have perused and notified this Act with their respective deliberations.?
Historically, the Hon’ble High Courts of the states of Punjab & Haryana, Rajasthan and Bombay have recognized fantasy sports as games of skill and a legitimate business activity protected under Article 19(1)(g) of the Constitution of India.

Business Bulls
On the other side of the betting table are countless players who struggle to find their way out of the confusing legal and regulatory maze. Amongst several other petitioners are The All-India Gaming Federation (AIGF), the self-regulatory fantasy sports industry body Federation of Indian Fantasy Sports (FIFS), and the real-money gaming firms Mobile Premier League (MPL), Games24x7, A23(Ace2Three), Junglee Games, Gameskraft, and Pacific Games.

Undoubtedly, the impact of such bans on the universe would be staggering. An EY All India Gaming Federation Report estimates the number of approximately 80 million real-money gamers in 2020 to soar to 150 million by 2023. These numbers are a good litmus test to this being no less than a legitimate industry in the country’s economy.

The Open Wink
Irrespective of the triumph the Karnataka Judgment may have brought to the industry muscle, it is yet to be seen and realized whether the legal and regulatory whips will remain. Many States continue to grapple with a blanket ban on any gaming platform in their attempts to operate without any strings attached. An excellent school of thought perceives that while several fantasy sports platforms thrive and operate as games of skill, several others are indulging in pure-play gambling as a habit that citizens discover is riddled with foul play.

It is noteworthy that the Karnataka Judgment leaves the door open for relevant authorities to bring in any legislation that aligns with the Constitution against gambling. This, coupled with the fact that the decision on skill-based online and fantasy gaming is already pending in the Supreme Court, will need the industry to wait and watch how the regulatory skies could change once the Apex Court has pronounced its stand.

The Generalization Err
The Mumbai High Court was the first one of its kind to have announced its judgment, clarifying that the game of Rummy is not gambling. In addition, the various judgments that come into play seem to corroborate the same conviction, namely, one cannot ban or stop online gaming in the garb of gambling. ?The concerned authorities and judicial forums need to scrutinize the workings of games of all sorts and the related intricacies.?

The Citizen’s Innocence?
To give perspective to this entire debate, should not the people’s skillset be considered a major driving factor, given that the citizens of the State are as skilled at applying their minds while playing such online games as they are at other activities? What are the chances that such games hinge on sheer luck or chance and not skill? However, much one may validate the mathematics and any other skill set in an online game of cards or data analysis of how a cricket game would fare, it is essential to know whether the users are suitably skilled. And if such confidence is reposed in respect of skill-based online games, why are the rules regulating physical lottery-based games that attract participants ?in various States not clearly defined?

A Dire Need
Keeping aside conflicting views and opinions, the authorities, State Governments, and the Judiciary must set a coherent set of legal and regulatory guidelines to erase all remaining grey areas. Furthermore, it is essential to create a harmonious environment for all stakeholders in the online gaming sector: the big business houses whose revenue models are based on online gaming platforms; the Government; and the citizens at large who need clarity on the law of the land on this controversial issue.

The author is a Partner, J Sagar & Associates. The views expressed are personal and not of the firm.
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