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Navigating the Legal Landscape: Online Gaming, Betting, and Gambling in India

AI/MLNavigating the Legal Landscape: Online Gaming, Betting, and Gambling in India

Online gaming, betting, and gambling encompass activities conducted via the internet or digital platforms. They can be categorized into two main types: games of chance and games of skill. Games of chance rely on random factors like roulette and lottery, while games of skill involve player ability, strategy, and knowledge, as seen in chess and poker.

In India, these activities fall under a complex and diverse legal framework that varies between states and central laws. State governments have the authority to legislate on betting and gambling, but the central government can also regulate certain aspects through Entry 97 of List I. Additionally, central laws like the Information Technology Act, Foreign Exchange Management Act, and Indian Penal Code have implications for these activities.

The legal status of online gaming, betting, and gambling in India hinges on whether they are considered games of chance or skill. Games of chance are generally prohibited by most state laws, except where licensed land-based casinos or lotteries exist. Games of skill are typically allowed, although some states have imposed restrictions or bans. However, a uniform definition for skill or chance games does not exist, making determinations case-specific.

The Indian online gaming industry has grown substantially and is expected to reach USD 2.8 billion by 2023. It encompasses various segments such as casual games, fantasy sports, e-sports, and card games, attracting significant investments from domestic and foreign players.

Despite growth, the industry faces legal uncertainties due to the lack of a consistent regulatory framework. Recent developments include draft amendments to the IT Rules to regulate online gaming platforms, focusing on registration, licensing, self-regulation, user verification, transparency, and prevention of addiction and fraud. These amendments aim to create a uniform regulatory framework.

Advertising standards for real-money gaming were introduced in 2020, requiring disclosure of financial risks, avoiding targeting minors, and not portraying gaming as an income source. However, an advisory in 2022 discouraged advertising online betting platforms, citing their illegality in most parts of the country.

In 2023, the Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Amendment Rules simplified regulations by incorporating any game involving deposits with winning expectations as an “online game,” regardless of skill or chance. Advertisements for such games must adhere to 2020 and 2022 guidelines along with the 2023 IT Amendment Rules.

In conclusion, India’s online gaming, betting, and gambling sector is flourishing but faces legal challenges. Recent developments indicate a move towards regulation and licensing, though challenges such as defining skill and chance games, harmonizing state and central laws, and ensuring enforcement remain. Comprehensive central legislation is needed to create a conducive environment for industry growth.

By FCCT Editorial Team

Disclaimer: The views expressed in this article are independent views solely of the author(s) expressed in their private capacity.

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