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India is game on for online games even as legal ambiguities persist

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India is game on for online games even as legal ambiguities persist


The Bridge Desk

Updated: 30 March 2022 10:12 AM GMT

When it comes to online gaming, Indians are game on—even though the government rules remain unclear to this day. This is despite the persisting ambiguities surrounding one of India's favorite pastime activities, forcing not just the operators but also the players to go through a maze of vague regulation and persistent yet unconstitutional law enforcement with seemingly no end in sight.

Self-regulating bodies are effectively toothless tigers

There have been multiple attempts to police the thriving online gaming sector, especially with more people opting to play their favorite leisure game of slots online. Yet none of these efforts to establish a regulatory mechanism has seen the light. Case in point is the Sports (Online Gaming and Prevention of Fraud) Bill, 2018 that was introduced in Lok Sabha in December 2018.

The goal of the Sports Bill was to establish a regulatory mechanism for India's online gaming sector while also preventing and penalizing sports fraud. Ambuj Sonal and Subham Biswal noted in their piece published on Mondaq that the bill has already lapsed, yet the ambiguities when it comes to the online gaming legal framework continues to persist.

The lack of a clear regulatory landscape has prompted industry stakeholders to self-regulate, or at least attempt at policing their operations on their own and to the best of their abilities. The All India Gaming Federation (AIGF) and the Federation of Indian Fantasy Sports (FIFS) are self-regulating bodies with charters that govern their members. These charters go a long way towards streamlining the governance of the online gaming platforms, but they're effectively toothless tigers in the face of law enforcement especially since the rules only apply to their members.

Clear regulatory framework the way out for India's online gaming industry

But what is the way out for India's online gaming sector? Unlike lottery in India, which enjoys huge popularity and acceptance both among players and state governments, other verticals of online gaming are left operating in a muddy regulatory landscape—at least until the politicians make up their mind on how to regulate the industry.

Clearly, the way out is a requisite legislation that will "codify and provide strict regulatory framework to streamline the conduct of the platforms in the online gaming sector," according to Sonal and Biswal. An effective regulatory framework will also ensure that issues including licensing, data protection of players, geographic restrictions and exclusions, problem gambling, and security are addressed.

India will stand to benefit greatly by taking a page—or several pages—out of the playbooks by the established gaming markets like Sweden, Denmark, Italy, the United Kingdom, Ireland, Germany, Spain, France, and the United States, among the many mature markets today. These governments, according to the ENV Media report on off-shore gambling licenses, put extra emphasis on consumer protection while also promoting responsible gambling—a win for all parties involved.

For India, ENV Media analysts said the policy makers need to consider several key aspects, including operators should be mandated to pay state taxes and abide local laws; operators must be able to self-regulate, in addition to adhering to government regulations; and safety nets must be included, especially with the rise of digital tools. The central regulation should also allow companies to practice responsible marketing by putting honest advertising as one of the prerequisites of an operating license, and ensure that minors are protected via restrictions and awareness programs.

"In a nation with widespread illegal betting and gambling (reportedly worth well over $100bn annually), criminal activity has had the chance to flourish and continues to engage public resources and law-enforcement efforts. Emerging markets (India in particular but not only) will benefit from creating their own Central regulatory framework, a Gambling oversight body, and a Consumer Data protection regulation," according to the ENV Media report.

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