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Why Telangana is being cautious about regulating real money gaming platforms

The Telangana IT Secretary emphasised the need to pass online gambling legislation that wouldn’t suffer judicial setbacks.

“We are treading cautiously when it comes to [online] gaming,” Jayesh Ranjan, Principal Secretary Industries & Commerce (I&C) Department & Information Technology, Electronics and Communications (ITE&C), Government of Telangana, said, referring to online betting and wagering platforms. “Blanket banning is not a solution, one needs to have a distinction between games of skill and games of chance. The pushbacks from law enforcement and other agencies are largely driven by games of chance. We cannot rule out that certain things can’t be manipulated, the need is to understand how we navigate the regulatory framework, we also need to dive deeper and find a middle path… We are taking certain steps in Telangana, but want to ensure that these are not challenged by courts or lead to public outcry,” he added.

Ranjan was speaking at GATO’21, an event organised by the Internet and Mobile Association of India (IAMAI). His remarks come even as Andhra Pradesh, Telangana’s neighbouring state, banned all forms of betting and wagering in the state. Telangana appears, from Ranjan’s remarks, to prefer that games of skill continue to operate under restrictions and regulations that won’t be struck down by the courts, like what happened with Tamil Nadu’s law. But there is some movement in the state government — Ranjan said in a different event on August 25 that the Telangana government is working on a self-regulation framework for online real money gaming platforms.

Central law coming?

“Centrally, it would help if the Central Government recognises certain games of skill and legislates over them. We can replicate some global models too where one needs to obtain a license to operate the games under specific conditions,” said Bhavin Pandya, Co-Founder and CEO, Games24x7.

Pandya’s wish may just come true: as MediaNama reported exclusively, the central government is exploring a “uniform approach” to regulate online gaming and gambling.

Both states and the central government are somewhat powerless in regulating betting and gambling platforms online; apps and websites can only be blocked by the central government (something the IT Minister clarified in a letter to Andhra Pradesh’s Chief Minister), and the central government can’t block these platforms because constitutionally the power to regulate betting and gambling rests with the states.

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As explained by the Ministry of Electronics & Information Technology recently, different states have different approaches. Most states’ legislations don’t cover online gambling, as these laws are older than the internet. But states that tried prohibiting betting and gambling apps instead of setting up a licensing framework may suffer setbacks; the Madras High Court’s striking down of Tamil Nadu’s law, based tightly on Supreme Court precedent, may leave states powerless in how they approach these platforms.

How states approach real money gaming

Judicial setbacks aren’t stopping states from trying to outlaw real money gaming, skill-based or chance-based: Karnataka and Uttar Pradesh appear to be moving towards a ban on online betting platforms. While Uttar Pradesh’s proposed law has loose exceptions for games of skill, Karnataka only exempts horse racing.

  • Sikkim‘s Online Gaming (Regulation) Act, 2008 is “the first Indian legislation to expressly permit and regulate online gaming,” MEITY said in its affidavit with the Delhi High Court. However, “the State Government restricted the offering of ‘online games and sports games’ to the physical premises of ‘gaming parlours’ through intranet gaming terminals within the geographical boundaries of the State by enacting the Sikkim Online Gaming (Regulation) Amendment Act, 2015.”
  • Nagaland enacted the Nagaland Prohibition of Gambling and Promotion and Regulation of Online Games of Skill Act in 2015. This law “seeks to have pan-India application by extending the applicability of the said Act to all those States where the games so being offered are legally permissible ‘games of skill,’” MEITY said.
  • Andhra Pradesh amended its gaming act to prohibit online betting and “online games for money or other stakes”. The ban is being challenged at the Andhra Pradesh High Court, though it is unclear who the petitioners are.

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I cover the digital content ecosystem and telecom for MediaNama.

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