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