Online gambling and gaming is fast catching the eyes of entrepreneurs and players alike. We have been frequently approached regarding ascertaining the legality of online gambling and gaming in India. As on date, we have no dedicated online gambling and gaming laws in India. However, keeping in mind the importance of this area there must be dedicated online gambling and gaming laws and regulations in India so that this area is properly regulated and chances of e-commerce frauds and cyber crimes can be minimised.
Recently, it was decided that an anti match fixing law would be formulated for India. This decision was taken due to growing cases of match fixing in series like IPL. We also need to regulate online gambling and gaming activities in India so that no stakeholder is found on the wrong side of the law.
Online gambling and gaming is essentially an international phenomenon as the website may be registered in the name of a person residing in country A, the server hosting the website may be located in country B and the players could be located in multiple countries.
Similarly, the software and application providers may also be involved in legal hassles due to the supply of their products and services in India. For instance, forensics analysis of Nokia’s computers used to download software in India is presently undertaken by Indian tax authorities to investigate violation of income tax and transfer pricing provisions of India.
In short, online gambling and gaming may be legal in one country whereas it may be illegal in another. The country where it is illegal may prosecute the website owner, server provider and the players in their respective jurisdictions as the effect of the same is felt in their jurisdictions and residents of these countries may found involved in online gambling and gaming that is illegal in these countries.
There is a serious conflict of laws in the area of online gambling and gaming industry. When it comes to India, this conflict is further aggravated due to conflict of laws between respective States of India. While in a few States it may be legal in almost all other States it is illegal.
As far as gambling in India is concerned, we have a Central law on gambling known as Public Gambling Act of 1867. Similarly, we have many State laws on gambling that are mostly based upon the central law. Further, almost all the State laws are regulating real world or offline gambling in India. The exception in this regard can be found in the laws applicable in places like Goa and Sikkim.
Recently Goa has made its casino laws very stringent keep in mind the money laundering, black money and tax evasion issues in mind. Similarly, Sikkim is also in the process of harmonising its laws with the central laws.
As far as judiciary is concerned, the Supreme Court of India has made a distinction between skills based and chance based gaming activities. Of course, each case depends upon its own facts and circumstances and the respective state law and we cannot apply one decision uniformly in all cases of gambling and online gambling.
The skill and chance and state subject legal arguments are not sufficient to comply with complicated techno legal requirements of India as on date. So before launching an e-commerce portal, the concerned person or company must make it sure that techno legal requirements are duly complied with.
We believe that cyber law due diligence, Internet intermediary liability and cyber due diligence for Indian companies must be kept in mind by various e-commerce websites and players. The skill and chance and state subject legal arguments are not sufficient to comply with complicated techno legal requirements of India as on date. So before launching an e-commerce portal, the concerned person or company must make it sure that techno legal requirements are duly complied with.