This year, a number of states have rolled out their versions of the so-called regulation in an attempt to govern India’s thriving online gambling industry. These efforts, however, have only succeeded in creating more debate on how to best regulate the evolving sector with a framework that is viable for all stakeholders, from the governments to casino games operators and more importantly, the players.
Where does online gaming regulation end and prohibition begin?
India’s online gaming market today is flourishing, which, for the most part, can be attributed to the rapid rise in the number of consumers who are moving towards the digital route for their day-to-day activities as well as for casual entertainment experiences. In response to this growth, states have opted to govern the sector not by regulating online gambling activities, but by creating blanket bans that will wean people away from the so-called “vices” of playing online roulette and live casino games for real money, as officials in Karnataka have said.
History has shown, however, that blanket bans don’t work—not in the many mature markets around the world, and especially not in the relatively young online gambling market of India.
In India, high courts have overturned the online gambling bans set out by the states of Tamil Nadu and Kerala on grounds of illegality and unconstitutionality. Meanwhile, the Karnataka High Court is mulling the petitions filed by skill games operators seeking guidance on the statewide blanket ban, which covers all types of online games with betting involved, even online chess, fantasy sports, poker, and bridge.
As law experts have long pointed out, the Supreme Court has consistently held that skill games are legitimate and constitutionally protected commercial activities that can be played or organized for gain and profit. Suhaan Mukerji, founding partner of PLR Chambers, recently opined that, “…playing games of skill (online or offline) is judicially protected and cannot be viewed as gambling or gaming activities.”
Strike a balance between control and player freedom: analysts
The many benefits of strong national regulation are undeniable; the only question is how can India’s government officials effectively utilize the economic boost from the gaming verticals while also ensuring that players are protected.
What India can do is take a look at what other jurisdictions have been doing and learn from both their wins and their mistakes. Sweden is a perfect example of this, as explained by analysts at SevenJackpots. The European country saw a growth in unlicensed casino operations after its gaming authority imposed too many limits on licensed operations: “Spin-stops and spending limits became a few too many, leaving the market vulnerable to offshore sites unwilling to observe requirements on deposits, timing, and data sharing that are the foundation of secure gaming environments.”
So what should India’s government-mandated standards look like? Experts said authorities must take these key aspects into consideration: operators should be mandated to pay state taxes and abide by local laws; operators must be able to self-regulate, in addition to adhering to government regulations; safety nets must be included, especially with the rise of digital tools; allowing companies to practice responsible marketing by putting honest advertising as one of the prerequisites of an operating license; and ensuring the minors are protected via restrictions and awareness programs.
“Online casinos, lotteries, and betting sites have been keen to align with 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,” according to the SevenJackpots report. “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.”
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