In an attempt to oversee India’s flourishing online gaming industry, different states have come up with their own interpretations of how to best regulate online casino games—which basically boil down to laying out a blanket ban on any games with real money involved.
Sweeping bans on online gaming do not work
It’s evident, however, that these blanket bans do not work. History has shown that bans only result in more illegal and unsafe operations to pop up. A new report by SevenJackpots on Indian gambling regulation noted how mature markets like Sweden have shown that too many gambling limits have left the market vulnerable to offshore sites that are unwilling to follow the requirements set by the state gambling regulator.
In India’s case, the high courts have already stepped in—on several occasions this year alone—to overturn the blanket bans imposed by state authorities on the basis of their unconstitutionality. Karnataka’s sweeping online gaming ban, which will impact popular online games with the exception of online lottery and horse race betting, is also expected to have a similar fate since the Supreme Court has consistently held that skill games are legitimate.
Suhaan Mukerji, founding partner of PLR Chambers, cited several cases in which the Supreme Court has ruled that competitions involving substantial skill are not considered gambling activities. In an editorial for India Business Law Journal, Mukerji wrote: “Such competitions were business activities, the protection of which was guaranteed under article 19(1)(g) of the constitution.”
He added, “The Supreme Court held that gambling was payment of a prize for a chance to win a prize. Compared with a game of skill, the court held that a game of chance was one in which the element of chance predominated over the element of skill, and a game of skill was one in which the element of skill predominated over the element of chance, and that it was the dominant element – skill or chance – which determined the character of the game.
What can be expected from Indian gambling regulation?
Done correctly, India’s gambling regulation will pave the way for more streamlined online gaming operations in the country, which can potentially make the Indian online gambling market a force to be reckoned with among its counterparts around the world.
A lot of work is needed to achieve this—and the first step will need Indian government officials to strike a balance between control and player freedom, according to analysts at ENV Media. Then, there are some key regulation aspects that must be taken into consideration, including: mandating operators to abide local laws and pay state taxes; self-regulation, in addition to local regulations, for operators; adding safety nets as digital tools continue to innovate; including honest advertising as one of the important requirements to get an operating license, with a view of responsible marketing; and also ensuring that minors are protected by adding restrictions and spearheading awareness programs.
It will take a lot of time, trial and error, and willpower for a strong national regulation to come through, but once that’s in effect and fully accepted by industry stakeholders, officials can expect overall improvements not just in better business climate for operators and taxes for the government, but also user safety and customer support for players.
As the SevenJackpots researchers have explained, “Online casinos, lotteries, and betting sites have been keen to align with a formal government regulation. When an industry the size and importance of Indian gaming is exposed to risks, it is in the public interest to require legitimate companies to follow high operational standards. With benefits ranging from consumer protection to taxation and job creation, bringing more transparency into the sector will stimulate investor interest and produce spillover benefits for society at large.”
