Monday, 18 July 2022

State legislations on online gambling

 State legislations on online gambling

Different states have enacted legislation that distinguishes between a game of skill and a game of

chance. There are some states that prohibit both a game of chance and a game of skill if they are

conducted for monetary gain. As an illustration, consider the recent Tamil Nadu state legislation on

online gambling, which was met with widespread opposition from the gaming community and

ultimately struck down by the High Court of Madras. To amend the Tamil Nadu Gaming and Police

Laws (Amendment) Act, 2020 (Amendment) the Tamil Nadu Gaming and Police Laws (Amendment)

Act, 2020 was passed. The Amendment was specifically written to prohibit games of skill when they

are played for wagers, bets, money, or other stakes, as defined by the Constitution. The High Court

of Madras upheld the constitutionality of this amendment. According to the court, certain provisions

of the Amendment were unconstitutional.

For starters, the court ruled that games of skill are considered business activities under Article

19(1)(g) of the Indian Constitution and are therefore protected. As a result, it was determined that

games of skill could not be prohibited. As a second point of contention, the court determined that

certain prohibitions contained in the Amendment are not proportionate to the purpose of the

Amendment. The court determined that the state's intent was only to prohibit gambling in games of

chance, and not in games of skill, and that the state's intent was to prohibit gambling in games of

skill. Therefore, the Amendment is unreasonably burdensome and disproportionate to the situation.

To summarise: The Supreme Court determined that states have authority to enact laws on betting

and gambling that are limited to games of chance and not those requiring skill. As a result, the

Amendment was deemed unconstitutional by the court.

Despite this, the state of Karnataka recently passed a law along the same lines. It was passed to

amend the Karnataka Police (Amendment) Act, 1963, which was previously passed in the year 2000.

The said Act makes all forms of gambling, including online gaming, a cognizable and non-bailable

offence, and it applies to all jurisdictions. Essentially, all games, including skill games, would be

prohibited if they were played for a prize or for monetary compensation. This was not well received

by the gaming community as a result of this. With the exception of Karnataka and Tamil Nadu, the

states of Andhra Pradesh and Telangana have banned online games, which include games of skill,

even if they are played for monetary compensation or reward. However, while most of the states

listed above forbid any form of gambling, including skill-based games for money, there are a few

states that have legalised them and have put in place proper regulations for online gambling. After

passing the Sikkim Online Gaming (Regulation Act, 2008) and the Sikkim Online Gaming (Regulation

Rules, 2009), the state of Sikkim became the first in the country to legalise online gambling. In

accordance with said Act, "online games" include any and all forms of entertainment including

games of chance, which are prohibited in the majority of other jurisdictions. Applications for the

operation of online games and sports games in Sikkim are granted licences by the state government

for a period of five years. People from other states, on the other hand, will be unable to access such

games through websites. This type of licenced online games and sports games is restricted to the

physical premises of the gaming parlour, which must be located within the boundaries of Sikkim

state. On January 1, 2020, the state of Meghalaya passed the Meghalaya Regulation of Gaming Act,

2021, which sought to regulate the online gaming industry in its jurisdiction. It governs both a skill-

based and a chance-based game of chance. The state of Meghalaya grants licences to applicants for

a period of five years after they submit an application. The Licensees are required to pay a "gaming

royalty," which is a percentage of the amount of money earned after deducting prize money

deductions and other expenses and charges from the total amount of money earned.

The state of Nagaland, in contrast to the states of Sikkim and Meghalaya, has only legalised online

gambling games based on skill, with every game of chance being outlawed. In order to regulate

online games of skill, the Nagaland Prohibition of Gambling and Promotion and Regulation of Online

Games of Skill Act, 2015 was enacted. Under this Act, licences are issued to entities that offer games

of skill on their platforms, and the act is currently in effect. Being able to regulate online gambling

with such clarity eliminates the need for a black market for online gambling websites to operate. It is

necessary for the federal government to draw inspiration from these state laws in order to regulate

online gambling uniformly across all states and to avoid ambiguity in the interpretation and

enforcement of the laws. Every now and then, discussions about regulating online gambling take

place in the Parliament, such as the one that took place last week in the Rajya Sabha. Shashi

Tharoor, an Indian politician who currently serves as a Member of Parliament in the Lok Sabha, took

the initiative to address the issue of regulating online gambling in 2018. In 2018, he introduced a

private bill in relation to online gambling that was passed by the Lok Sabha. Despite this, such

discussions and attempts have proven to be fruitless.

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