Even if Not Perfect, Proposed Online Gaming Regulation Bill is a Huge Leap Forward

The Bill’s Shortcomings Analyzed

A legal analysis of the bill to regulate online gaming recently proposed at the Lok Sabha was provided by three lawyers from the Khaitan & Co law firm. The authors, Gaurang Mansinghka, Kevin Shah, and Surbhi Kejriwal, worry about the doubtful adherence to the constitutional provisions by the bill as it seeks national-level regulation over gambling, which is a subject that the Union Constitution delegates to the legislative powers of the states.

The bill requires the Central Government to establish an Online Gaming Commission mandated to supervise the operations of gaming platforms and take action to battle illegal gaming in cyberspace. The Commission will also have the power to issue, suspend and cancel licenses for online gaming websites, as well as to determine the rules for obtaining such a license.

Operating an unlicensed gaming server or website is defined as a cognisable and bailable offense, punishable by imprisonment of no more than three years and a fine. Nevertheless, Pure Win and other gaming platforms registered outside the country will be able to use backend, hosting and maintenance services provided by Indian companies and persons.

The trio of lawyers wonders why the proposed bill makes no distinction between real money games and casual gaming by requiring both categories to be licensed. “The need of the hour is to have a regulatory framework for real money gaming and not casual gaming, which is already governed by various other legislations,” they write.

Mansinghka, Shah, and Kejriwal also express their concern that the proposed bill fails to address a number of societal issues, including Know Your Customer (KYV) mechanisms, user data protection, grievance redressal systems and others.

The authors conclude that “A robust regulatory and legal environment, devoid of uncertainties, is the need of the hour for this sunrise industry to achieve its true potential and ensure that the business can scale quickly,” and express a hope that there will be sufficient political will for the bill to be adopted and come into force.

A Huge Leap Forward for the Country

Even if not devoid of certain shortcomings, the proposed Online Gaming Regulation Bill is a huge leap forward for India, even if just because there are now conversations and concrete suggestions on how online gaming regulation including real money should be implemented.

Solving the potential issue with the unconstitutionality of the proposed act is again a matter of political will of the members of parliament. Eventual constitutional changes in this regard would require a large consensus among parties, but the issue transcends simple political party interests.

All the other ‘shortcomings’ of the proposed bill can be solved by the Online Gaming Commission itself when implementing and from time to time amending the rules for obtaining a license and operating under it, including the setting of different criteria and rules for real money and casual gaming platforms.

By implementing a requirement for age verification and KYC checks by using Aadhar Card for playing casino and other real money games, the Commission will be able to take advantage of India’s unique digital ID system to solve a number of societal issues related to the dangers associated with gaming and gambling online.

In its work, the Commission will also be able to take advantage of the leading global practice in the field of online gaming regulation and licensing by studying the examples of countries like the UK, Sweden, Denmark, France, the US and many others that have successfully regulated gaming in their online space.

Riguruous responsible gaming (RG) requirements, a self-exclusion system, limits on betting amounts, prohibition on gambling on credit, customer support and data protection protocols, are just examples of the measures that the Indian Online Gaming Commission can copy from licensing regimes from around the world and implement.

The Online Gaming (Regulation) Bill, 2022 was tabled at the Lok Sabha on April 1 by Adv. Dean Kuriakose, a Member of Parliament from the state of Kerala.

As the Statement of Objects and Reasons of the bill states, “There should be rules and regulations based on which Online games should be allowed to operate in India. There should be limitations like the amount of time one can play the game every day, maximum money that could be spent by one person etc. The rules and regulations must also keep up with the times, and the Online gaming commission will be in a position to regulate the industry by setting standards accordingly.”