THE ONLINE GAMING (REGULATION) BILL, 2022: One With Right Path But With Lot Of Loopholes.

 






The Online Gaming (Regulation) Bill, 2022 (Bill), a private member's bill, was introduced in the Lok Sabha on April 1, 2022, in the midst of the Indian Premier League's approaching media rights sale, which is anticipated to bring in enormous quantities of money.

 

·         Introduction:

Large Indian gaming enterprises now face a hefty financial burden since there is no unified national gambling regulation. One of India's fastest-growing businesses will get a great boost from the creation of a harmonised national gaming industry with clear actionable guidelines. The Online Gaming (Regulation) Bill, 2022, has been suggested in light of this context.

The proposed legislation aims to provide a controlled legal framework for gaming operations that will grow the industry and shield participants from the hazards involved.

 

·         Features of the bill:

With the help of the Bill, an Online Gaming Commission (referred to as "the Commission") will be created, and a licencing system will be put in place that would require licences from the Commission in order to provide and run gaming enterprises in India. According to the Bill, it is now illegal to sell and run gaming companies without a licence. There is also a bond requirement. Anyone discovered to have participated in gaming on an unlicensed website will also be subject to legal repercussions under the Bill.

The Commission will have the authority to keep an eye on the operation of websites that offer online gaming and to take measures to stop illegal online gaming.

Additionally, the Commission will create rules and regulations governing the terms of the licence, permits, authorization for users to access gaming websites, requirements for providing gaming services, terms for offering players credit facilities, fines or penalties, and any other matter it may deem appropriate.

 

·         Key notes of bill:

1. To establish the Online Gaming Commission (OGC), a group of professionals from the legal, regulatory, and cyberspace technology domains This commission will have the authority to oversee all facets of online gambling, including the creation of gaming laws and regulations as well as the issuing and revocation of licences.

2. The introduction of sanctions for imprisonment for licence conditions violations.

3. The OGC has broad regulatory authority.

4. Permitting foreign direct investments in the online gaming industry, including but not limited to technology partnerships.

5. To override all laws that are at odds with the proposed Bill (once it becomes an Act).

6. To submit the Central Government periodic special reports on topics relating to online gaming.

The proposed Bill is a step in the right direction since it aims to create a single law for a sector that now has several, sometimes at odds rules. Even so, there are still many unresolved issues in the bill. For instance, there is no distinction between skill-based and chance-based gaming, which leads to more red tape and increased bureaucracy in the absence of clearly defined procedures for grievance procedures, data protection, and licence approvals. The bill's vagueness merely serves to confuse state and federal rules, further complicating the regulatory system, and it makes no mention of how it will affect the current laws and regulations on the subject.

 

·         More About the bill:

Although the Bill's introduction is a positive start, there are still a number of critical issues that must be addressed in order to foster a positive economic environment for gaming enterprises and a secure gaming environment for the general public. For instance, the Bill does not distinguish between real money online casino games, casual games with real money components, and simple free games. It also does not distinguish between games of skill and games of chance, placing all gaming variants under the same licencing regime.

Even though the Bill seeks to regulate online gambling in India through numerous checks and balances, it currently suffers from a number of drawbacks:

1.      The difference between "games of skill" and "games of chance" is absent from the Bill. Furthermore, it is unclear from the Bill if its rules exclusively apply to for-real-money games or also apply to games played for free.

2.      Although this Bill intends to be the primary piece of law controlling gaming in India, it will eventually be subject to court review because, according to the Indian Constitution, neither gaming nor gambling are federal topics and may only be regulated by state governments.

3.      The Bill doesn't even offer a broad framework of gamer protection norms, leaving everything up to the Commission, with the exception of mentioning rules for notices on gaming websites and restrictions on credit facilities by operators.

4.      Furthermore, the legal framework required for the Bill to take effect, its relationship to the constitutional clause stating that games of chance and gambling are a state matter, as well as the current gaming laws and licencing regimes in states like Meghalaya, Nagaland, and Sikkim, are not discussed. As, the conflict between the present licencing system and the state gaming laws of fore-mentioned states is not addressed by the Bill.

5.      The Know Your Customer (KYC) standards, customer complaint systems, advertising and marketing regulations, user data protection, responsible gambling regulations, and other issues have not been addressed by the bill.

 

·         Overall Situation

The Federation of Indian Fantasy Sports ("FIFS") and the All India Gaming Federation ("AIGF"), two self-regulatory organisations created to oversee online gaming in India, have issued charters that now apply to the majority of real money game providers. Although these charters help to streamline the behaviour and control of the online gaming platforms, it is painfully obvious that there is no supporting national legislation.

 

·         CONCLUSION

While it is admirable that this business will be regulated at the federal level, this Bill attempts to accomplish this goal by using the time-tested legislative tool of India: the licence. The competition commission is an excellent illustration of how a principles-based approach, assisted by voluntary disclosures, and very significant punitive penalties by a quasi-judicial authority has proven to be a considerably more effective.


Written by 

Vanshika Sahu

LinkedIn

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