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All India Gaming Federation wants regulation of online gambling to be an election promise

We missed this earlier. Ahead of the upcoming elections, All India Gaming Federation (AIGF), has approached members of Bharatiya Janta Party (BJP) and Indian National Congress (INC) manifesto committees for suggesting that they include legalisation and regulation of online gaming in their manifesto respectively before the finalising of it. Regulation of gaming is not a part of the Congress manifesto.

The industry body says that formally regulating and taxing the online gaming industry under a centralised authority can make it a potential source for the generation of substantial revenues to the exchequer, the creation of jobs, curbing and elimination of unlawful activities, like match-fixing and money laundering. AIGF says that it is working with state governments and authorities to introduce 26% FDI in the segment and legalise gaming related activities. Note that the Lodha committee report has also suggested that it would serve both the game and economy if betting was legalised as has been done in the United Kingdom.

Legal landscape related to gaming in India

According to the AIGF, gaming is a state subject in India such that state has the power to legislate and enforce an Act regarding gaming. In terms of the states that have their own gaming Act, these Acts are archaic in nature. In the age when the gaming business has gone digital over the years, there is a must need to have a central regulatory framework to regulate the online gaming industry.

• The ‘gaming’ industry is said to be consisting of 2 verticals – gambling and skill based on social or casual gaming both offline and online. In most of the Indian laws, gambling activities are referred to as ‘gaming’.

• In India, the constitution provides gambling and betting as subject-matters for legislation under the List II, Entry 34 of the Seventh Schedule which confers power on the State to legislate over this matter. However, online gaming has not been mentioned as a subject matter under Schedule VII of the Constitution of India.

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• Presently there are no comprehensive regulations or guidelines on gaming that regulate the online gaming sector. Licenses to the online games are issued by most of the states in accordance to the rules on ‘Games of Skill’ under the Public Gambling Act, 1867 (the “PGA”) which is also an archaic legislation as introduced much before the emergence of Internet. The PGA has been adopted by very fewer States.

• Considering the online gaming, the states of Sikkim and Nagaland have introduced specific statutes on online gambling. Both these states allow interested operators wishing to provide online gambling services within the state to apply for a license. Nagaland has expressly allowed operators to offer fantasy games services as well. Whereas other States prohibit it altogether.

Shashi Tharoor and the Law Commission

It may be noted that the Thiruvananthapuram MP and senior Congress leader Dr.Shashi Tharoor had introduced a private member’s bill, namely, the Sports (Online Gaming & Prevention of Fraud) Bill, 2018 in the Lok Sabha on 28 December 2018. The objective of the Bill, 2018 introduces an efficient and effective administration that can maintain the integrity of sports in India by preventing and penalising the fraud in sports and for fair regulation of online gaming.

The bill to the large extent is based on the Law Commission of India’s recommendations in its 276th Report, in which the commission chaired by Justice (retd.) BS Chauhan recommended that parliament should pass a law to regulate gambling and betting, either using its powers to regulate media and electronic communication or pass a model law for States.

In July 2018, the 21st Law Commission in its 276th report said, “legalising betting and gambling is not desirable in India in the present scenario. Therefore, the state authorities must ensure enforcement of a complete ban on unlawful betting and gambling.”

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• The 276th Report estimates that the present gambling market will be worth $360 million and is expected to rise to $1 billion by 2021. Regulating the industry can assist in increased revenue generation.

• The Report has been introduced in furtherance of the Supreme Court’s directive issued in the case of Board of Control for Cricket in India v. Cricket Association of Bihar & Ors., wherein the Apex Court mandated the Law Commission to study the possibility of legalising betting in India.

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