Indian Online Gaming And Online Gambling Laws Need To Tackle Use Of VPNs And Proxies For Illegal And Prohibited Access

Praveen-DalalWhile the world is fast moving in the direction of online gaming and gambling yet online gaming and online gambling laws in India are still evolving. We have no dedicated laws for online gaming, online gambling, online fantasy sports, online poker, etc in India. In fact, we have no laws that can effectively deal with legal issues of online gaming, online gambling, online fantasy sports, e-sports, etc in India. As a result we have prohibitions and restrictions that have been imposed by central laws and laws of different states making the entire gaming and gambling activities very murky. This position has become more complicated since the Supreme Court of India has refused to decide about legality of online poker, online rummy and online card games in India.

As gambling is a state subject, different states have reacted differently in this regard. While states like Nagaland (pdf) have adopted a very liberal approach yet other have taken a very conservative approach. Some states have expressly allowed games of skills and gambling while other have specifically prohibited them in all forms. This has given rise to an inter-state conflict that the central government is required to resolve.

For instance, recently a PIL was filed in the state of Maharashtra to ban sale of online lotteries from other states into the state of Maharashtra. The Maharashtra government faced a loss of Rs. 933 crore due to these illegal activities and it has decided to transfer the case to the Central Bureau of Investigation (CBI) very soon. Till now the case was being investigated by the economic offences wing. In the past, Kerala refused permission to Future Gaming Solutions India Private Ltd to sell Nagaland lotteries in the state. Even the Crime Investigation Department (CID) of the Andhra Pradesh police had sought a ban on the website of “Playwin” which had allegedly been selling online lotteries banned in the state. As the legal framework for website blocking in India is still evolving, blocking may not be a good and long term solution.

Indian gaming and gambling industry is presently suffering from lack of a techno legal framework that can manage online gaming and online gambling related issues. For instance, the cyber law due diligence (pdf) and Internet intermediary liability law in India are two such techno legal requirements that the central government has failed to enforce in India so far. This also applies to online gaming and online gambling industry of India as well.

Recently the Indian government has clarified about the Foreign Direct Investment (FDI) in E-Commerce Sector of India. As per the “Consolidated FDI Policy Circular 2015” (pdf) (FDI Policy), FDI is prohibited in lottery business including Government/private lottery, online lotteries, etc and gambling and betting including casinos etc. As far as the intentions of central government are concerned, it is not in favour of allowing FDI in lotteries, gambling and betting. Further, central government also refused to give its opinion on the legality or illegality of online games and online gambling in India. As a result the online gaming and online gambling entrepreneurs of India are now required to comply with multiple laws of India, both central as well as state wise. For reasons unknown, most of the gaming and gambling entrepreneurs of India are not complying with techno legal requirements of different laws of India.

Take the example of geo location feature of an online gaming or online gambling website of India or foreign jurisdiction. While the website in question may claim in its terms and conditions that users from a particular territory in India or from foreign jurisdiction are not allowed to access or play on the website yet the website is actually doing little to achieve this task. This practically means that if users of state A are prohibited from accessing websites/servers located in state B due to the laws of State A, still users of state A can access the website. This applies to international websites and its features as well that are not available and accessible in India. For instance, although online game “Pokemon Go” has not been launched officially in India yet users and gamers are using virtual private networks (VPNs) to change their locations and catch Pokemons in New York and London while sitting in their Indian homes. Similarly, geo location restrictions can be bypassed in India using proxies and VPNs thereby violating the sovereignty and legislative powers of various states.

This is just a single example how techno legal requirements are ignored in India. There are many more techno legal issues that are simply ignored by online gaming and online gaming industry and stakeholders in India. As the Indian government itself is not aware of these issues, these websites and business are still untouched. However, the moment Indian government would be aware of the illegalities and contraventions committed by online gaming and online gambling websites of India and foreign jurisdictions, a prosecution spree would be inevitable.

We at Perry4Law Organisation (P4LO) strongly recommend that the central government must urgently formulate techno legal laws for online gaming and online gambling industry of India. This is required as the situation is becoming ugly day by day due to inaction on the part of various states and central government. We hope the central government would do the needful in this regard very soon.

Legality Of Online Poker In Kerala For Poker Players And Online Poker Websites

P4LOA prominent question discussed among the poker community of India/Kerala these days is will Kerala government make playing poker legal in the state? However, the question itself is incomplete till we ask another more significant question. The question is it legal to play online poker in the state of Kerala? Perry4Law Law Firm believes that to appreciate the legal position of poker in the state of Kerala, we must first analyse whether playing poker is legal or illegal in Kerala. Further, we must also understand whether running of a poker business in Kerala is legal or not. If the answer to both these questions is in affirmative, then only we can proceed further to decide whether playing of online poker and running of an online poker website are legal or illegal in Kerala.

Many online poker and online rummy websites have simply ignored this essential legal exercise and they are already in legal tangles. It is obvious that offline and online poker are totally different fields and their legal obligations, liabilities and rights are also different. Most of the rummy and poker websites and businesses are violating Indian laws by simply applying the traditional and untested legal principles to modern days gaming conditions. If this was the case there was nothing that could have prevented the central government or Supreme Court of India from declaring online poker or online rummy legal in India. On the contrary, the central government refused to give its opinion and the Supreme Court decided not to legally analyse the legality of online rummy and online poker in India.

If this is the position, it is strange that some online poker and online rummy websites in India are claiming that playing and running of such businesses are legal in India without any legal compliance. Just like any other business, neither online poker nor online rummy are legal in India till these websites comply with techno legal requirements as prescribed by Indian laws. Similar rules apply to online fantasy sports in India that are required to comply with techno legal requirements of Indian laws.

Recently members of the All India Gambling Federation (AIGF) met the Kerala government seeking a revision to existing norms on gambling. However, the Kerala government has not given any assurances regarding this as the government had to first consider the issue in detail. This action of Kerala government is in line with the communication/recommendations of Perry4Law Organisation (P4LO) that it had/gave to the Kerala government recently. We discussed about the media reports that claimed that Kerala is considering declaring games like poker, online games, etc as games of skills. However, when it comes to online poker, online rummy, etc this becomes a tricky issue and we conveyed this fact to Kerala government very clearly and with a good set of techno legal research works of Perry4Law Organisation (P4LO). We would update our readers in this regard whenever we have any further information from Kerala government and if the same is not detrimental to the interests of Kerala government and our own interests.

Perry4Law Organisation (P4LO) is presently working in the direction of providing a techno legal framework for online gaming industry in general and online gambling industry in particular. Online gaming field requires consolidation but the same is not possible till there is a common set of legal framework that all States of India follow. Perry4Law Organisation (P4LO) is also in touch with other states in this regard and we have got positive response from them so far. We are very optimistic that even the state of Kerala would cooperate with us in this regard.

The Kerala Games Act 1960 is very stringent regarding gambling and gambling related activities. For instance, Section 11 of the Act provides that it shall not be necessary, in order to convict any person of keeping a common gaming house or of being concerned in the management of any common gaming house, to prove that any person found playing at any game was playing for money, wager, bet or stake. However, Section 14 of the Act provides that nothing in the foregoing provisions of this Act shall be held to apply to any game of mere skill wherever played. The terms “wherever played” here means played within the territorial boundaries of the state of Kerala alone and not outside the same. Section 14A of the Act provides that the Government may, if they are satisfied that in any game the element of skills is more predominant than the element of chance, by notification in the Gazette, exempt such game from all or any of the provisions of this Act, subject to such restrictions and conditions as may be specified in the notification. Thus, it is possible for the state of Kerala to exempt offline games like poker, rummy, etc from the applicability of this Act. However, when it comes to online poker, online rummy, online fantasy sports, etc the state of Kerala cannot has its way so easily. Even if offline poker is declared to be exempt in Kerala that would be subject to many terms and compliances that offline poker businesses have to follow. These terms, conditions and compliance requirements can be prescribed by the state of Kerala only once it analyses the legal situation in great detail. And this is exactly what the state of Kerala has intimated to AIGF.

The offline and online poker, rummy and online fantasy sports stakeholders must also not take the Kerala Act very lightly. Section 19 of the Act provides that any police officer not below the rank of a Sub Inspector of Police may arrest without a warrant any person committing in his view any offence made punishable by this Act. Online poker, online rummy and online fantasy sports websites can be easily prosecuted in Kerala if they fail to comply with cyber law due diligence (pdf) and many more techno legal requirements as prescribed by Indian laws. Kerala government is not very enthusiastic when it comes to online gambling and related activities. For instance, the Kerala Gaming (Amendment) Act, 2005 has banned online lotteries in the state of Kerala. It means that Kerala is moving in the direction of banning online gambling rather than promoting it despite the contrary claims of media reports.

Perry4Law Organisation (P4LO) may provide its techno legal suggestions to Kerala government in this regard if requested to do so by the Kerala government. As far as gaming and gambling stakeholders are concerned, we would like to stress that they must ensure techno legal compliances to stay on the right side of the law.

Sikkim Government Bans Locals From Entering Into State Casinos In Public Interest

Sikkim Government Bans Locals From Entering Into State Casinos In Public InterestIndian Constitution has divided law making powers between various states and the centre. Gambling is a subject that falls within the legislative powers of various states of India. Most of the states in India have prohibited gambling activities within the jurisdiction of their respective state. However, tourism and revenue generation has forced many states to allow controlled gambling in few states. These states are also required to safeguard the interest of locals from the evil of gambling. This is the reason why most of the states have now started either prohibiting the entry of the locals or making the entry fees very high thereby making the casinos or gambling houses available to rich only.

Goa has been increasing the tariffs to deter the common man from visiting them. Because of an increase in tariffs, there has been a decrease in onshore casinos in the state. On the other hand, the Sikkim government has brought out an official notification prohibiting residents of the state from entering its two casinos to safeguard the interest of the local people. So the trend is going in the direction of tourism and revenue generation by the states and restricting access to casinos for the locals.

As per the notification dated July 4, only persons having the photo identity card or passport issued from outside the State of Sikkim will be permitted entry into the Casinos. An amendment to the Sikkim Casino Games (Control and Tax) Rules, 2007, has been made to accommodate this change. Surprisingly, the Sikkim government has not consulted lawyers before barring home state residents from gambling.

A resident of Sikkim could challenge the state’s rule in court as violation of Article 14 of the Indian Constitution that mandates that State shall not deny to any person equality before the law or the equal protection of the laws within the territory of India. But courts are favouring states when the restrictions placed on residents regarding certain forms of entertainment or recreation have been imposed in bonafide public interest. For instance, in December last year, the Supreme Court had upheld the Kerala government’s decision to curtail consumption of liquor in bars and other public places in larger public interest. The apex court had earlier also upheld bans on online lotteries in various states on the ground that it ruined the lives of several families.

As the notification has become applicable, now the casino owners would be required to maintain the records of guests visiting the casinos because the government will keep a track of all the entries. The licence granted to the casino may be suspended or cancelled if it is found violating the government order.

Anti-Casino Groups In Goa Demand Removal Of Offshore Casinos From River Mandovi And Amend Prevention Of Gambling Act To Ban Casinos

Anti-Casino Groups In Goa Demand Removal Of Offshore Casinos From River Mandovi And Amend Prevention Of Gambling Act To Ban CasinosOffshore casino vessels presently docked in River Mandovi of Chorao island are facing heat of the locals who are opposing such casinos. As per media reports, anti-casino groups have demanded that the government shift casino Caravela away from the Chorao island in River Mandovi within 15 days. The protesters were headed by independent legislator Rohan Khaunte, Congress MLA Pandurang Madkaikar and social activist Aires Rodrigues. They are also protesting against anchoring of an offshore casino vessels in river Mandovi.

Reacting to this protest, Chief Minister Laxmikant Parsekar said that at the time when the central government has been soliciting investments in India, casinos in the state cannot be shut down. He advocated for a policy that does not increase casinos in Goa but one that raises tariffs to deter the common man from visiting them. Because of an increase in tariffs, there has been a decrease in onshore casinos in the state.

He has also clarified that his government is not responsible for addition of any new casino in the state and for removal of existing casinos form the state due procedure has to be followed. He refused to take any haste or knee jerk actions based upon the protests from various stakeholders.  He also informed that the Captain of Ports has already been directed to identify an alternative location for the offshore casinos.

The central government has been organising many summits to attract investors to India and those who have already invested in the state cannot be asked to leave abruptly.  This may force the casino owners to approach the courts and obtain a stay order. Parsekar alleged that political opponents are creating issue over casinos as a ‘poll gimmick’ in Goa ahead of next year’s Assembly election.

The chief minister also expressed a desire to appoint a gaming commission as soon as possible and said that a file in this regard is already in circulation. The proposed gaming commission would regulate and monitor the casino industry in Goa. Perry4Law Organisation (P4LO) welcomes this step to establish gaming commission as that would go a long way in ensuring regulation of gaming industry in the state in a legal manner. At the same time the gaming commission could also take a call regarding online games like online rummy, online poker, online fantasy sports, etc.

Legality Of Running And Playing Online Fantasy Sports In India

Indian population is very enthusiastic about sports and sports related activities. Indian sports has got a boost in the form of online gaming that has transformed physical sports into virtual sports, e-games, e-sports, online games, fantasy sports, etc. As on date we have no dedicated online gaming and online gambling laws in India. Similarly, we have no dedicated fantasy sports law in India till now. This is in line with the exiting game laws like online poker, online rummy, online lotteries, etc that are still not governed by any dedicated Indian law. The result is inevitable i.e. online card games in India are in limbo and legal troubles.

We at Perry4Law Law Firm are frequently approached regarding legality of online games and fantasy sports/games in India. For the larger interest of gaming community of India, we are providing a basic guideline about legality of running and playing online fantasy sports and games in India. Please note this this is not a legal consultancy and interested stakeholders must con cult a lawyers or law firm of their own choice. Of course, if you wish you can also establish a client attorney relationship with Perry4Law and seek our techno legal online gaming service.

Before discussing about legality of fantasy sports it is pertinent to know a little about it. Briefly speaking, a fantasy sport is an online game that involves selection of and competition among virtual teams for points. These points can be redeemed in multiple ways and money or cash is one of them. However, when cash for stakes is involved, a fantasy game or sport is required to comply with additional techno legal compliances.

The present trends among fantasy sports stakeholders in India is to apply the tests of traditional rummy to online poker, online rummy and fantasy sports. However, this is a wrong approach. At Perry4Law we strongly recommend that online poker, online rummy, online lotteries, fantasy sports, etc require customised and separate treatment than simply applying the skills v chance criteria. Even the central government and Supreme Court of India are cautious about these issues and they have deliberately refrained from commenting upon the legalities of online games in India. Without going into much details, it is sufficient to say that relying solely upon skills v chance criteria for running online poker, online rummy, fantasy sports, etc would be a big mistake and a sure recipe of attracting legal sanctions in India.

In United States the Unlawful Internet Gambling Enforcement Act of 2006 (pdf) (UIGEA) generally prohibits funds transfers to businesses engaged in unlawful internet wagering. While UIGEA does not impact the legality of any particular activity permitted or prohibited under other laws, it does contain some express exemptions to its funds transfer prohibitions. One of these exemptions from the UIGEA prohibitions is for fantasy sports that meet certain criteria. This means that fantasy sports that are based on teams of real multiple athletes from multiple real world teams, that have prizes established before the event starts, that use the skill of participants to determine the outcome, are exempted from the definition of a bet or wager that is the basis for requiring banks to identify and block funds transfers.

However, this exemption does not mean that fantasy sports is permitted or legal in US. All the UIGEA has done is creating an exemption in favour of some categories of fantasy sports. UIGEA has specifically mentioned that no provision of the applicable subchapter shall be construed as altering, limiting, or extending any Federal or State law or Tribal-State compact prohibiting, permitting, or regulating gambling within the United States. Since UIGEA is not a criminal gambling statute and it specifically does not alter any criminal gambling laws thus UIGEA does not make fantasy sports legal in US. Federal criminal gambling statutes are found in Title 18 of U.S. Code, such as the Federal Wire Act 18 U.S. Code § 1084 that deals with transmission of wagering information and its penalties and the Illegal Gambling Business Act 18 U.S. Code § 1955 that imposes prohibition of illegal gambling businesses.

As far as India is concerned, there is no clear regulatory framework that can be looked upon to decide legality or illegality of online poker, online rummy, online card games, fantasy sports, etc. However, there are some very complicated techno legal compliances that are required to be complied with to clear an online gaming or fantasy sports website from legal troubles. Unfortunately, online gaming and fantasy sports websites in India are not complying with these techno legal requirements and they are on the wrong side of Indian laws.

Recently the Indian government has clarified about the Foreign Direct Investment (FDI) in E-Commerce Sector of India. As per the “Consolidated FDI Policy Circular 2015” (pdf) (FDI Policy), FDI is prohibited in lottery business including Government/private lottery, online lotteries, etc and gambling and betting including casinos etc. Recently the Crime Investigation Department (CID) of the Andhra Pradesh police had sought a ban on the website of “Playwin” which had allegedly been selling online lotteries banned in the state.

As on date, online gaming, online gambling and lotteries websites are not complying with the internet intermediary compliances and cyber law due diligence (pdf) requirements prescribed under the Information Technology Act 2000. Similarly, almost all of the online poker websites in India are violating one or other laws of India. Although online gaming market in India is booming yet regulatory compliances cannot be ignored. It seems online gaming and online gambling industry of India is not considering regulations while conducting their businesses in India.

Perry4Law conducted a techno legal audit of various fantasy sports websites operating in India and we found the same problems with them as have been discussed above. Almost all of these fantasy sports websites have used a single cut-copy-paste criteria when it comes to techno legal compliances and drafting of legal documents of the websites. Clearly, these online fantasy sports websites are violating the laws of India and they may be prosecuted very soon. Those using mobile applications can also be prosecuted if they fail to comply with techno legal regulatory norms of India.

Even the banks, payment gateways and online payment merchants, mobile payment vendors, etc supporting these online poker, online rummy, online card games and fantasy sports websites can be held liable for not following cyber law due diligence norms as they have blindly approved online payment option to these illegal and law breaking websites. These banks and payment gateways can also be held liable for money laundering, FEMA violations and assisting in tax evasion. If such banks, payment gateways and online payment merchants have already approved such illegal and law breaking online poker, online rummy, online games and fantasy sports websites in India, it is in their own interest to cancel such approval immediately. The banks etc must ask them to first comply with applicable techno legal compliances and then support their claims with a proper techno legal consultancy from a reputed law firm.

If you need a techno legal compliance and legal consultancy from Perry4Law for your online games or fantasy sports, please establish a client attorney relationship so that we can start working upon your project. Perry4Law wishes all the best to all gaming stakeholders and entrepreneurs.

PIL Filed For Banning Online Lotteries From Other States In State Of Maharashtra

India has been struggling hard to deal with issues of online gambling, online gaming and online lotteries for long. Till now we have no dedicated online gambling and gaming laws in India. This position has become more complicated since the Supreme Court of India has refused to decide about legality of online poker, online rummy and online card games in India.

Recently the Indian government has clarified about the Foreign Direct Investment (FDI) in E-Commerce Sector of India. As per the “Consolidated FDI Policy Circular 2015” (pdf) (FDI Policy), FDI is prohibited in lottery business including Government/private lottery, online lotteries, etc and gambling and betting including casinos etc. Recently the Crime Investigation Department (CID) of the Andhra Pradesh police had sought a ban on the  website of “Playwin” which had allegedly been selling online lotteries banned in the state.

This episode has also proved that online gaming, online gambling and lotteries websites are not complying with the internet intermediary compliances and cyber law due diligence (pdf) requirements prescribed under the Information Technology Act 2000. Similarly, almost all of the online poker websites in India are violating one or other laws of India. Although online gaming market in India is booming yet regulatory compliances cannot be ignored. It seems online gaming and online gambling industry of India is not considering regulations while conducting their businesses in India.

A disturbing trend of “legal violations” is fast dominating the online gaming industry of India. For instance, the fine line and distinction between online gambling and online gaming in India is not appreciated and understood by online gambling and gaming enthusiastics of India. As a result they are frequently prosecuted in India for violating online gaming and online gambling laws of India. Even technical mechanisms are also used to curb such activities in restricted territories or zones so that activities of one state may not violate the laws of other state of India.

In the past, Kerala refused permission to Future Gaming Solutions India Private Ltd to sell Nagaland lotteries in the state. Now a social worker had knocked judiciary’s doors praying for immediate ban on unauthorized and alluring online lotteries. Promoted by other states within Maharashtra, he contended that over 1,300 bogus online lotteries under various strange names are operating here and ruining lives of millions. A division bench comprising justice Bhushan Gavai and justice Swapna Joshi issued notices to central and state governments seeking their reply before court resumes after summer vacations.

Petitioner Chandan Trivedi through his counsel Shrirang Bhandarkar has urged the court to direct authorities to take stern action against lottery operators. The PIL stated that state government has permitted only 13 online lotteries. But operators with permissions from states like Mizoram, Arunachal Pradesh, Sikkim, and Meghalaya, are conducting online lotteries where results are announced in every 15 minutes on single-digit. The petitioner termed the entire activity as totally illegal.

The petitioner contended that under guise of online lotteries, open gambling is on in brazen violation of Lottery Regulations. So far, these operators have caused a loss of Rs933 crore to state exchequer. Many lottery operators on the lines of ‘matka’ have developed software which gives hand written receipts to circumvent tax payable to state exchequer and transactions remain unaccounted. The PIL also quoted state finance minister Sudhir Mungantiwar’s statement in legislature in which he had promised to seek legal opinion to ban online lottery companies of other states, which have duped the exchequer crores of rupees. The government was also trying to trace owners of these companies and probe was handed over to Economic Offence Wing (EOW), the minister had informed. Trivedi claimed that he brought patent illegality to the notice of all authorities, including top political executives, but nobody paid any heed and millions of people are addicted to it.

According to lottery rules framed by Maharashtra government, it’s mandatory for operators to pay advance tax on all types of online lotteries in the state. But, the lottery companies challenged legality of rules and the high court had given an interim stay on it. Taking advantage of it, the online lottery companies from outside states avoided payment of tax to the tune of Rs933.14 crore during 2007-09. In 2009, the high court lifted the interim stay and allowed the state government to collect the tax, but no recovery has been made, the PIL mentioned.

SC Refuses To Decide Legality Of Online Rummy, Poker And Card Games

SC Refuses To Decide Legality Of Online Rummy, Poker And Card GamesOnline gaming websites ranging from poker, rummy, card games, etc have been in a fix as to the legality of running such websites in India. Till now the matter was pending for adjudication before the Supreme Court of India and they were hoping that the legality or illegality of such online poker or online rummy websites would be decided by the Supreme Court very soon.

The position on date is that online card games websites in India are already in limbo and now the Supreme Court of India has made this position more uncertain and legally vulnerable. As per the latest order of the Supreme Court, it has refused to decide the legality or illegality of online games like poker, rummy, etc. The Supreme Court has clarified that the present petitions before it pertain to offline rummy only and managing online rummy or online poker is still a legally risky area.

Supreme Court has categorically mentioned that it would not decide the legality of online poker or online rummy till the Indian government comes out with a policy decision in this regard. In the past Supreme Court asked the Indian government to clarify its stand regarding online rummy but the government refused to provide any opinion in this regard. Thus, legality of online poker or online rummy is still a grey area and online gaming and gambling stakeholders must comply with the applicable laws of India till Indian government comes up with some policy or law in this regard.

Now the ball is in Indian government’s court and it has to come up with rules and regulations regarding online game and online gambling activities in India. The Indian government has to decide not only about the skills versus gambling criteria but also the techno legal aspects that are attributable to use of technology.

With the present Supreme Court’s order, cyber law due diligence (PDF) has become a necessity for online poker and rummy websites. Most of them have failed to address crucial techno legal aspects by presuming that online rummy or online poker are legally permissible in India. It is true that till now managing online poker or online rummy activities in India are not governed by a dedicated legal framework but this is no reason to ignore the provisions of Information Technology Act, 2000 and other applicable laws of India.

It would be a fatal mistake to assume that the refusal by the Supreme Court to decide about the legality of online rummy or online poker is a fee licence to engage in these activities. On the contrary, it is a warning sign that the entire business structure revolving around online gaming and gambling industry of India need to be in strict compliance with applicable laws of India.

Perry4Law hopes that the online rummy and online poker stakeholders would appreciate the seriousness of the situation and make their business activities and websites law compliant and this starts with drafting of appropriate terms and conditions and other legal documents for the websites.

Online Card Games Websites In India Are In Limbo

Online Card Games Websites In India Are In LimboOnline gaming has created great interest among the gaming stakeholders. India has also witnesses many companies and gaming stakeholders trying to establish their online gaming business. These include launch of online poker and rummy websites, online card games websites, etc. However, in the absence of a holistic and comprehensive regulatory framework in this regard, online card games and online games are still legally risky ventures.

In fact, online card games websites may be legally risky if not properly drafted and managed. Till now the position regarding playing rummy with stakes is not clear and different High Courts have given conflicting judgments in this regard. This has exposed all those who are playing card games with stakes to numerous litigations across the India.

For instance, a majority of online poker and rummy websites are flouting laws of India and they can be punished any time by the government. Perry4Law strongly recommends that till the time Indian Supreme Court or Central Government clarifies the legal position regarding online gaming in India, the online gaming/gambling stakeholders must comply with existing and applicable techno legal requirements of Indian laws.

Unfortunately, this is not happening as on date and online gaming websites are openly flouting the laws of India. They are not at all complying with the cyber law due diligence (PDF) requirements of Indian cyber law.

What is more surprising is the stand of Indian Government in this regard. Indian Government is neither clarifying its stand before the Supreme Court nor is bringing a suitable techno legal legislation to make the regulatory uncertainty clear.

Perry4Law believes that the least various online gaming stakeholders can do is to comply with the maximum possible laws of India. This compliance requirement must consider technological, traditional and commercial laws of India.

Online Gambling In India And Legal Issues

Online Gambling In India And Legal IssuesGambling in India is age old and as a general rule it is prohibited in India. The Constitution of India has demarcated the legislation making powers between the centre and states. The power to make rules and laws regarding gaming and gambling has been conferred upon the states. As a result different states have passed different laws upon gaming and gambling in their respective states. Some states have absolutely prohibited gambling in their jurisdiction whereas some have allowed the same to be done within their jurisdictions.

While gaming and gambling entrepreneurs are still struggling to understand and apply the laws of gaming and gambling of various states, information and communication technology (ICT) has added another complicated dimension to this entire scenario. Now gaming and gambling is being conducted in an online environment with the help of software, hardware and other ICT systems. As a result Indian government is finding it very difficult to deal with online gambling in India.

There are no specific and dedicated online gaming and gambling laws in India. This has not deterred various individuals and companies from exploring the online gaming industry of India. This has also resulted in increased numbers of arrests and prosecutions of various individuals and companies in India. For instance, recently the owner of an online betting website for IPL 7 was arrested in Mumbai for allowing betting on his website. Similar arrests have been made by police of Delhi, Ahmedabad, Mumbai, etc. The Central Bureau of Investigation (CBI) has also established a Sports Integrity Unit to investigate illegal sports betting in India.

Meanwhile some stakeholders and entrepreneurs approached the Supreme Court of India to get clarity on the legality of online games like rummy, poker, etc. Supreme Court asked the opinion of Central Government in this regard but the same has been informally denied by the Central Government.  This means that till the time Supreme Court actually says that online rummy, online poker and online card games are legal in India, majority of these gaming stakeholders may be exposing themselves to legal risks and civil and criminal liabilities.

There is also a very thin line between skills oriented gaming and gambling. We at Perry4Law believe that this is a “subjective test” that is based upon the perceptions of individual or company analysing the same. For one an online game may be skills based game hence allowed whereas for another it may be an act of gambling hence punishable. Perry4Law strongly recommends that till the time Indian Supreme Court or Central Government clarifies the legal position regarding online gambling in India, the online gaming/gambling stakeholders must comply with existing and applicable techno legal requirements of Indian laws.

Central Government Denies To Give Opinion Upon The Legality Of Online Games Like Rummy, Poker, Card Games, Etc

Central Government Denies To Give Opinion Upon The Legality Of Online Games Like Rummy, Poker, Card Games, EtcIndian Supreme Court is presently hearing a matter that can decide whether playing online rummy, poker and card games is legal or illegal in India. Further, Supreme Court has already clarified that the stay upon the Madras High Court’s judgment would benefit only the parties to the litigation. This means that till the time Supreme Court actually says that online rummy, online poker and online card games are legal in India, majority of these gaming stakeholders may be exposing themselves to legal risks and civil and criminal liabilities.

Realising the complex legal issues involved in the litigation, the Supreme Court of India referred the matter to Central Government for its opinion. However, Central Government has not provided any formal reply so far and a formal reply is expected from Central Government on12th November 2014, the next data of hearing of this case. The Centre has asked the Supreme Court to adjudicate the matter at its own level citing different judicial decisions and constitutional issues.

Online gambling laws of India are complicated in nature  as gambling is a State subject and different State have enacted different laws regarding gambling activities in India. We have a central law on gambling called the 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. In Sikkim, a provisional And Regular Licence can be obtained under the Sikkim Online Gaming (Regulation) Act, 2008.

To bring uniformity among various laws regarding gambling in India, the present Law Commission of India is analysing whether the Public Gambling Act of 1867 should be repealed or not. Meanwhile, those engaging in online betting and gambling are at risks of being arrested and prosecuted. Recently the owner of an online betting website for IPL 7 was arrested in Mumbai for allowing betting on his website. Similar arrests have been made by police of Delhi, Ahmedabad, Mumbai, etc. The income tax official also raided four offshore casino vessels and one onshore casino in Panaji. The Central Bureau of Investigation (CBI) has also established a Sports Integrity Unit to investigate illegal sports betting in India. The legality of use of Bitcoins for gaming and gambling in India is also doubtful and full of legal risks.

There are certain rules to decide whether online gambling and betting is legal in India or not. There are totally different set of rules for running an online poker website in India. In many cases police in India has arrested people indulging in illegal online betting. In short, legality of online gambling and online gaming is still a grey area that requires extensive legal research and compliances before launching the website in this regard. The Supreme Court of India has to decide these complicated issues in the present litigation.  If the SC holds online rummy, online poker and card games for stakes as gambling, the states could prosecute those engaged in such activities within their jurisdictions. However, if the Supreme Court decides in favour of such online games with stakes, then the Central Government would be required to bring uniform legislation for India. That would be a tough task for the Central Government as the proposed legislation must be techno legal in nature to be effective and contemporary. This is the reason why the central government is not willing to take any action in this regard.

World over countries are finding it difficult to regulate online gaming, betting and gambling activities due to conflict of laws in cyberspace. Online gambling and gaming laws and regulations in India and conflict principles would be very difficult to resolve in these circumstances. Other issues that require techno legal legislation skills on the part of Central Government are blocking of illegal gambling websites in India, taxation issues, online gaming regulations, mobile gaming regulations, payment gateways issues, mobile payment issues, mobile applications legal issues, etc.

Those planning to engage in online games including online rummy, online poker, etc must comply with techno legal requirements prescribed by various existing laws of India. Otherwise, they would find themselves on the wrong side of Indian laws.

Supreme Court Of India Asks Central Government To Clarify Its Stand Regarding Legality Of Online Rummy And Card Games With Stakes

Supreme Court Of India Asks Central Government To Clarify Its Stand Regarding Legality Of Online Rummy And Card Games With StakesOnline gaming and gambling laws in India are in a state of flux. As the stakes are high and online gamings being a lucrative market in India, many stakeholders have taken up the matter before the Supreme Court of India to get a clear legal position. The decision of Indian Supreme Court may establish legality or illegality of online games like rummy, poker, etc.

However, we at Perry4Law believe that online rummy and online poker may still be illegal and punishable despite this judgement of Supreme Court. This is because Indian Supreme Court is not dealing with the legality of online rummy and online poker in strict and absolute sense. As a result the legal position in this field would remain a grey area. In fact, a decision by Supreme Court without any legislative support may be counterproductive.

The real trouble seems to be use of cash or stakes while conducting online rummy and poker competitions without following all the applicable laws of India. This issue is partially covered before the Supreme Court that also between the parties to this litigation alone. Both third parties and the parties to the litigation are in a legally risky position.

Supreme Court is very well aware of this situation and it has taken a stand that was very much required. The Court has asked the Central Government for its legal stand regarding games like online rummy, online poker, etc. The Court issues a notice to the Centre asking it to spell out its position on the legality or otherwise of the online game of rummy and card games involving stakes. The court also extended its stay on Madras High Court judgment that had held these games illegal as these involved gambling. However, the stay is applicable only to the petitioners before the Court. This means other are vulnerable to legal risks and they cannot take the protection of this stay.

The next hearing of the matter has been fixed for September 25, 2014. However, there are no hints that the matter would be settled very soon. It may take few more months or years before the matter is finally settled. We at Perry4Law strongly recommend that online gaming entrepreneurs must ensure techno legal compliance in order to stay on the right side of the law till legal position is made clear in this regard.

The Gambling (Licensing And Advertising) Act 2014 Of UK Faces Legal Challenge From GBGA

The Gambling (Licensing And Advertising) Act 2014 Of UK Faces Legal Challenge From GBGAOnline gaming and gambling industry of United Kingdom (UK) is fast changing. Regulations governing online gaming and gambling are also redrafted by UK to bring additional control over foreign online gaming and gambling service providers who are targeting UK territory and its citizens.  Internet service providers (ISPs) in UK were also asked to insert warning pages for gambling sites that are unlicensed in the UK. However, they refused to comply with this request of UK government.

Meanwhile, the UK Gaming (Licensing and Advertising) Bill has become an applicable law. Following agreement by both Houses on the text of the Bill it received Royal Assent on 14 May 2014. The Gambling (Licensing and Advertising) Act 2014 of UK (PDF) has made some significant changes in the way oversees online gaming and gambling service providers have to operate in UK or target UK players.

The Bill is now an Act of Parliament and an applicable law in UK. The Act requires any operator wishing to transact with or advertise to British consumers to obtain an operating licence from the Gambling Commission and is expected to come into force on 01 October 2014. The Act has also introduced 15 percent point of consumption tax applied to gaming operators.

However, the Gibraltar Betting and Gaming Association (GBGA) has filed a legal challenge against the UK Gambling Commission’s decision of its new licensing system and a 15 percent point of consumption tax for gaming operators. The GBGA believes this regime was designed purely for economic reasons. GBGA Chief Executive Peter Howitt explained in a statement released on Monday, “The only beneficiaries of this change are the UK domestic industry and the Gambling Commission itself, which has persuaded the UK government that it should be the global regulator of this high tech and complex industry.” The GBGA also claims that this regime impedes the right to free movement of services as outlined by Article 56 of the Treaty of the Functioning of the European Union.

Back in India, Indian Supreme Court is hearing about the legality of playing Rummy. While this would be a crucial decision yet it must be kept in mind that despite Supreme Court’s decision, online rummy and online poker may still be punishable in India. The position as on date is that online rummy and online poker are still legally risky in India.

At Perry4Law we believe that Indian players involved in online gaming and gambling activities and targeting UK and Indian markets must comply with both Indian and UK laws. This is really tricky if they intend to explore other foreign markets as well as conflict of laws in cyberspace are really difficult to manage.

Online Rummy And Online Poker May Still Be Punishable In India Despite Supreme Court’s Decision

PRAVEEN DALAL MANAGING PARTNER OF PERRY4LAW AND CEO OF PTLBOnline Gaming is a multi crore industry in India. Despite this fact, we have no dedicated Online Gaming and Online Gambling Laws in India. This has made the Legal Position regarding Online Games like Rummy, Poker, etc really confusing and murky. Due to diverse legal actions and situations, the matter has reached before the Supreme Court of India. However, there are great misunderstandings and misconceptions regarding the nature of present legal proceedings before the Indian Supreme Court.

For instance, the core issue before the Supreme Court pertains to Legality of playing Rummy with Cash Stakes. Supreme Court in this case is not concerned with Online Rummy and it is definitely not concerned with Online Poker. However, Online Gaming Entrepreneurs are very hopeful with the decision of the Supreme Court that may be pronounced in late 2014 or in the year 2015.

Rummy has already been pronounced to be a “Game of Skill” by Indian Supreme Court on numerous counts and there is nothing new about this “Settled Legal Position” in the present litigation. What is new is the declaration to be made by Supreme Court whether Rummy can be played with Cash Stakes and whether Online Rummy is Legal or Illegal in India?” Presently the Indian Supreme Court is considering the Cash Stakes aspect and there are no hints that Legality of Online Rummy would also be adjudicated upon by the Court. Further, parallel analogy and interpretation vis-à-vis Online Poker is not only misplaced but is also not in question before the Supreme Court of India.

The major “Legal Fallacy” in the Online Gaming business activities in India is that entrepreneurs are applying the offline world’s standards and rules to the online environment. This is the reason that Supreme Court of India may not adjudicate upon the online part of gaming activities in India. And applying the offline version of the gaming activities to online games, including upon Online Poker and Online Rummy, by Gaming Entrepreneurs of India is “Not a Legally Sound Strategy”.

Even if the Supreme Court reiterates that Rummy is a “Game of Skill” and declare that Cash Stakes are allowed, this decision would not make Playing, Displaying and Hosting of Online Rummy in India “Automatically Legal”. Online Rummy and Online Poker would still remain Illegal unless certain Techno Legal Compliances are followed by the Gaming Entrepreneurs of India. In short, Online Rummy and Online Poker may still be an Offence and Punishable in India unless proper Cyber Law Due Diligence (PDF) and Techno Legal Compliances are followed by Gaming Entrepreneurs.

Indian Supreme Court Decision Could Establish Legality Or Illegality Of Online Rummy And Online Poker In India

Indian Supreme Court Decision Could Establish Legality Or Illegality Of Online Rummy And Online Poker In IndiaOnline gaming is a very lucrative industry in India and it is booming at a rapid rate. Lots of entrepreneurs are exploring Indian market in this regard and they have come up with many innovative ideas and games. While this is a good sign for Indian economy and business community yet it is also important for Indian government to suitably regulate the business affairs of these gaming portals.

As more and mobile devices are being used for day to day transactions, mobile gaming market segment has also been targeted by these gaming entrepreneurs. This has given rise to many unique legal challenges before these gaming portals. As on date we have no dedicated online gaming and gambling law in India and application of old laws to this new segment is creating many problems.

States like Sikkim grants provisional and regular licence under the Sikkim Online Gaming (Regulation) Act, 2008. On the other hand, some Indian States expressly prohibit any form of online gaming and gambling in their jurisdictions. Now it has been mandated that foreign companies and e-commerce portals would be required to register in India and comply with Indian laws. This would require many techno legal compliances on the part of these companies especially following of the cyber law due diligence (PDF) and e-commerce due diligence in India.

Taxation issues like service tax, sales tax, etc have also started surfacing in India. Indian government is devising many new methods to make e-commerce and online gaming and gambling websites taxable for their business transactions. In fact, most of the e-commerce websites of India are already on the regulatory scanner of Enforcement Directorate (ED) for possible foreign exchange and foreign direct investment (FDI) violations.

Online rummy and online poker have attracted the attention of many gaming entrepreneurs in India. However, regulatory uncertainty has forced them not to explore these areas fully. It is still not clear whether it is legal to play online poker in India or not. Similar is the case with online rummy and none can clearly say that online rummy is legal in India to play till the matter is settled by either the Parliament or the Supreme Court of India. In fact, ancillary laws applicable to online poker and online rummy are flouted by almost all the poker and rummy websites operating in India whether they are Indian or foreign.

The Supreme Court of India is presently hearing a matter that would have a bearing on the interpretation of legality or illegality of online poker and online rummy in India. However, till the matter is conclusively decided by the Indian Supreme Court, it would be a sound business practice to comply with all the applicable laws of India while running various online poker and online rummy websites in India. Otherwise, civil and criminal prosecutions may occur and that would be a major setback for the gaming entrepreneurs of India.

Owner Of Online Betting Websites For IPL 7 Arrested In Mumbai

Owner Of Online Betting Websites For IPL 7 Arrested In MumbaiOnline gaming and gambling related prosecutions have significantly increased in India. Recently, the police of Delhi, Ahmedabad, Mumbai, etc have made arrests relating to illegal online bettings in India. The sports integrity unit of Central Bureau of Investigation (CBI) would also curb illegal sports betting in India. The Andhra Pradesh CID has requested Cert-In to block Playwin’s online lotteries website in AP. The income tax official also raided four offshore casino vessels and one onshore casino in Panaji. If we analyse these negative developments, it is clear that online betting in India is more on the side of contravention of laws than their compliances.

The latest to add to this list is the arrest of Jitendra Tanna alias Jitu Dhadi (50), the owner of the two websites www.vbet24.com and www.khelmasti.com and who started the private accounts for bookies and punters to accept bets on the IPL-7. He was arrested by the city crime branch from Kandivli on late Tuesday evening. He has been booked under various IPC sections of gambling, cheating, forgery, breach of trust and Information technology (IT) act and will be produce in the court on Wednesday. Police said that Jitu is a key accused in the betting racket.

”We will now interrogate him to know who and how many bookies/punters have accounts in his circle and whether he was fixed only betting or beyond that. We also want to interrogate him to know the flow of money through the illegal hawala operators”, said Nandkumar Gopale, senior inspector of property cell.

Police said that they are also likely to call the professionals who helped them tailor make this website and the software for the bookies. This is natural as well as website developers and software makers are also required to ensure cyber law due diligence (PDF) in India. Even mobile application developers are liable for violation of Indian laws through their applications.

The mobile gaming and online gaming related regulations in India are also not duly complied with by various stakeholders. The online gaming market in India is booming but regulatory compliances cannot be ignored.

Mobile Gaming Market In India And Legal Challenges

Mobile Gaming Market In India And Legal ChallengesEntertainment and media industry of India is all set to touch new heights in India. Information and communication technology (ICT) has also expanded the reach and scope of entertainment and media industry in India. Along with these growth trends there are also many challenges that must be taken care of by these industries.  These include cyber law due diligence requirements (PDF) and cyber security compliances as well.

Mobile and online gaming industry of India is also fast maturing and as per various business reports it is going to grow further in the coming years. However, the mobile application developers in India are not complying with Indian laws as on date. While online gaming market of India is fast growing yet when it comes to rules and regulations various gaming stakeholders are very lax in following the same. Even rules pertaining to mobile payment are not followed in true letter and spirit.

Many mobile gaming stakeholders in India have explored the route of e-commerce as well without following the legal requirements. Surprisingly, the e-commerce due diligence in India is neglected by even the investors and financial institutions.

There are set online gaming industry laws in India that must be adhered to by various online gaming stakeholders, including the mobile gaming companies and stakeholders. Individuals and companies providing online and mobile gaming facilities and services must not only comply with traditional laws of India but also with the Information Technology Act, 2000 (IT Act 2000) and many other techno legal regulations as applicable in India.

For instance, a mobile gaming provider may be held accountable for the contents and games it provides to various consumers and users. Mobile games providers are also “Internet intermediary” within the meaning of IT Act, 2000 and they can be held liable for violation of Internet intermediary obligations. Further, payment gateway issues are also involved in mobile gaining services.

If a company is involved in the creation and marketing of mobile games, its directors can be held liable for cyber law violations through such mobile games. The liability of directors can be found under various Indian laws like IT Act, 2000, Companies Act, 2013, Code of Criminal Procedure, 1973, Indian Penal Code, 1860, etc. Even the legal risks for companies developing e-commerce and online and mobile gaming applications and websites in India are well known.

In their own interest, mobile games providers in India must strictly comply with the techno legal requirements as prescribed by various Indian laws. Otherwise, they may find themselves on the wrong side of the Indian laws.

Delhi Police’s Crime Branch Busts Betting Syndicate For IPL Cricket Matches

Delhi Police’s Crime Branch Busts Betting Syndicate For IPL Cricket MatchesRecently the Ahmedabad crime branch arrested two bookies for their alleged role in betting on IPL Cricket matches. Now it has been reported that the Delhi Police’s crime branch has busted a betting syndicate for IPL cricket matches.

With the arrest of a mechanical engineer and three others, the Delhi police’s crime branch claimed to have busted a betting syndicate in the Rohini area of outer Delhi. According to the police, 40 mobile phones, one television, one mobile signal booster, one laptop, a printer and a voice recorder have been recovered in the raid.

On a tip-off that betting will be placed on IPL cricket match between Sunrises Hyderabad and Mumbai Indians on 30 April, a raid was conducted and the accused were arrested. They have been identified as Rakesh Sethi, Bantu Nagpal, Sanjay Hasija and Vishu Sethi.The police said that the accused were accepting bets in person as well as through mobile phones. They were also providing lines to several other bookies.

Three mobiles phones were being used as “dabba” to broadcast rates to the bookies. The betting amount of the match till the time of the raid was Rs 25 lakh and the gang has so far accepted betting amount to the tune of Rs 1 Crore in the ongoing IPL season, according to the police.

During interrogation, the accused disclosed that earlier they used to put bets on cricket matches and subsequently they decided to work as bookies as well as to provide betting lines to small bookies.

“They were earlier operating from Sonipat in Haryana but the local police got suspicious about their activities so they decided to shift to Rohini area to run their operations in rented premises so that their activities remain unnoticed in a new locality,” the cops said. Rakesh Sethi, the kingpin works as mechanical engineer in a private firm.

Ahmedabad Crime Branch Arrested Two Bookies For Their Alleged Role In Betting On IPL Cricket Matches

Ahmedabad Crime Branch Arrested Two Bookies For Their Alleged Role In Betting On IPL Cricket MatchesThe betting on IPL cricket matches is not new. Online gambling and betting in India is strictly regulated and any deviance is considered to be a crime. Despite this fact, illegal online gambling and betting is happening in India a lot.

The individuals who are indulging in illegal online gambling and betting have been operating from all corners of India. They are using technology to conduct their illegal operations and activities.

Now it has been reported that the city crime branch of Ahmedabad has arrested two bookies, who were wanted for their alleged role in betting on IPL cricket matches, from Bopal on Saturday. Acting on a tip-off, a team of the crime branch officials raided a shop in a complex on the Sardar Patel Ring Road in the evening and nabbed the two wanted bookies along with five others from the spot.

According to crime branch officials, the team lead by inspector B P Rojiya got a tip-off on Vinod Mulchandani and Jitu Bopal that they were found in Bopal area. The team swung into action and raided a shop in Amrapali Complex on Bopal road.

A member of the team said that the police seized Rs 1.5 lakh in cash, mobile phone worth Rs one lakh, laptop, diaries and a television set from the spot. Four cars belonging to the accused have also been seized from the spot by the police.

“Vinod Mulchandani is considered to be one of the top bookies in the city whose name surfaced during the last year’s IPL matches. In some of the recent cases, Jitu Bopal’s name had surfaced through whom some major transactions were routed. The diary seized from the spot will throw more light on the entire betting racket,” said an official.

Income Tax Official Raids Four Offshore Casino Vessels And One Onshore Casino In Panaji

Income Tax Official Raids Four Offshore Casino Vessels And One Onshore Casino In PanajiUse of gambling platforms for illegal transactions and money laundering has become a cause of concern for the tax authorities of India. Recently, the Enforcement Directorate (ED) raided and searched many Bitcoin companies operating in India. ED believes that Bitcoins can be used for hawala transactions and funding terror operations.

Now it has been reported that the income tax officials on Tuesday raided four offshore casino vessels and one onshore casino in Panaji, on a tip-off that they were indulging in illegal cash transactions. A team of officers from Bangalore raided the offices and vessels of Deltin Royale and Deltin Jaqk, Casino Pride 1 and Pride 2, as well as Hotel Neo Majestic in Porvorim that lodges Casino Paradise. The residences of company directors B R Arora, Ashok Wadia and Ashok Khetrapal in Goa, Mumbai and Delhi were also raided, I-T sources said.

The casinos were shut down for the day, and customers present, when the I-T officials arrived, were asked to leave. “But, we have not sealed any of the casinos yet,” an I-T detective clarified.

“We received information that the casinos were being used for money-laundering. As many of the high-rollers do not divulge the source of the money they spend gambling, the casinos are also unable to keep an account of the same,” said an I-T sleuth. “We have seized a large number of documents and some cash, and are now going through the accounts to gather evidence. It may take a few days to complete the process,” he added.

A Notification by Goa Government for Preventing Money Laundering and for Combating Financing of Terrorism 2012 (PDF) was issued in 2012 in this regard. By virtue of clause xiv of that notification the Goa Anti Money Laundering and Financing of Terrorism Guidelines 2013 (PDF) were formulated.

Through these regulations, the Goa Government had mandated that all casino operators follow certain “Know Your Customer” norms, requiring them to keep a record of the identity of every customer and the source of the person’s money. It is also compulsory for casino operators to report financial transactions of more than 10 lakh to the financial intelligence unit of the Central Government. All customer-related data should be retained for 10 years, according to the guidelines.

With reference to the new item appearing in the Media titled “IT department raids the premises of the company”, Delta Corp Ltd has Clarified to BSE that the Income Tax Authorities had carried out search and seizure proceedings at the premises of the Company and certain officials on April 29, 2014. The Company is in the process of collating & responding to all the queries raised by the Income Tax Authorities and the responsible officers of the company have been extending all co-operation in this regard.

Sports Integrity Unit Of Central Bureau Of Investigation (CBI) Would Curb Illegal Sports Betting In India

Sports Integrity Unit Of Central Bureau Of Investigation (CBI) Would Curb Illegal Sports Betting In IndiaIllegal sports betting have significantly increased in India. In fact, an anti match fixing law of India has already been proposed by Indian Government. However, online gambling and online betting are still not considered to be legal in India except in certain circumstances.

Meanwhile, the law enforcement agencies of India have been working hard to curb and punish online gambling rackets and activities in India. Many sophisticated online gambling rackets have been busted by Indian Police in the past. Recently Mumbai crime branch busted an online gambling network spreading across India.

Even the Central Bureau of Investigation (CBI) has set up a new “Sports Integrity Unit” as part of an effort to combat illegal sports betting in the country.  The new unit will operate under the guidance of the Special Crime Branch in Delhi. The unit will be tasked with investigating and enquiring into matters related to sport frauds, combating malpractices in sports and coordination with sports federations and law enforcement agencies.

The Sports Integrity Unit will also actively engage with the Indian Ministry of Youth Affairs and Sports in order to ensure that the law dealing with corruption in sports is put in place as soon as possible. The CBI said that by setting up the new unit, India will become one of the few nations in the world to have a dedicated set up as part of its federal investigative agency that focuses on sporting frauds.

Tamil Nadu Police Files Application In The Supreme Court Claiming That Sampath Kumar Falsely Deposed Before Mudgal Committee

Tamil Nadu Police Files Application In The Supreme Court Claiming That Sampath Kumar Falsely Deposed Before Mudgal CommitteeThe Tamil Nadu Government has recently moved the Supreme Court of India and rubbished the allegations by police officer Sampath Kumar relating to the IPL probe on betting and spot fixing. The application has described the allegations as false and baseless and said that he was suspended on charges of extortion and demanding bribe from bookies.

In its application seeking to implead itself in the ongoing BCCI case, it said Mr. Sampath Kumar had made scathing allegations against the Tamil Nadu Police without impleading the State of Tamil Nadu. It said the Intervener had not cited either CBCID or Tamil Nadu Government as respondent to misguide the Supreme Court. It said the attempt of the intervener was only to quash/stay the suspension order dated February 27 without following the procedure of first approaching the Central Administrative Tribunal.

A Bench of Justices A.K. Patnaik and Ibrahim Kalifulla had already reserved orders on the plea of Cricket Association of Bihar for a further probe by an independent panel, preferably by Justice Mudgal panel itself.

In his application Mr. Sampath Kumar had prayed for a SIT probe into the involvement of the top BCCI management and some cricket players in the betting and spot fixing scam in the IPL-6 matches. He said he was part of the investigation conducted earlier by the CBCID, Chennai and later shunted from the probe and suspended. He alleged that the Chennai Police had indulged in a cover up operation and had not conducted the probe in a free and fair manner.

The Tamil Nadu Police has filed an application in the Supreme Court saying that suspended IPS officer Sampath Kumar had falsely deposed before the Justice Mukul Mudgal committee that investigated the Indian Premier League spot-fixing and betting scandal. Kumar, who was part of Tamil Nadu Police’s ‘Q’ Branch, had opened a can of worms by alleging that bookies were involved with prominent players, including current Team India stars. Kumar’s deposition is part of a report submitted by the Mudgal panel to the Supreme Court on February 10.

For the first time, Tamil Nadu Police has clarified that it suspended Kumar in February this year for extracting a bribe from cricket bookies who operated in Chennai. The application says that Mahendra Singh Ranka (a bookie) gave Rs 30 lakh to Kumar “in his office” and delivered Rs 30 lakh to three persons as directed by the IPS officer. Kumar has appealed against his suspension in Supreme Court.

The Tamil Nadu Police application says: “In order to escape from the clutches of law, Kumar had falsely deposed before the probe committee headed by Justice Mudgal.” It adds: “Various allegations made by Kumar against CBCID are absolutely false, factually incorrect and baseless.”

The application also rejects Kumar’s claim that he was transferred from ‘Q’ branch to Tiruchy at the behest of influential persons wanting to derail investigations. Tamil Nadu Police says Kumar’s transfer was “according to government rules and procedures.”

Tamil Nadu police says Kumar should not have deposed before the Mudgal committee. “He was not a member of the investigating team,” said the application, adding the suspended IPS officer should have impleaded the CBCID, Tamil Nadu as a party in his petition to the apex court.

The Supreme Court is on the verge of forming a second committee to probe the IPL case further. The court wants Justice Mudgal to lead the probe again, but the Board of Control for Cricket in India is for a new man to head the second round of investigations. It remains to be seen how the court deals with the Tamil Nadu Police application as Kumar’s deposition can prove to be critical in the entire case.

Online Gaming Industry And Laws In India

Online Gaming Industry And Laws In IndiaThe fine line and distinction between online gambling and online gaming in India is not appreciated and understood by online gambling and gaming enthusiastics of India. As a result they are frequently prosecuted in India for violating online gaming and online gambling laws of India. Even technical mechanisms are also used to curb such activities in restricted territories or zones. For instance, the Andhra Pradesh CID has requested the Cert-In to block Playwin/s website in AP on the ground of prohibition of online gambling in AP. In the past, Kerala refused permission to Future Gaming Solutions India Private Ltd to sell Nagaland lotteries in the state.

We have very specific and unique online poker laws and regulations in India. Whether by design or ignorance, online poker websites in India are violating these laws of India. Many online poker players in India also play the same in active violation of the laws of India in this regard. Most of them are not even aware whether playing online poker in India is legal or illegal. Further, taxability of online poker websites of India is another crucial issue that is frequently ignored by poker entrepreneurs. The laws and regulations for online gambling and online gaming in India must be religiously followed by all the stakeholders in their own interest.

Both online gaming and online gambling market of India is fast booming and maturing. Entrepreneurs in these fields have started exploring Indian markets to establish their ventures in India. Some of them have even established their businesses in neighbour countries like Nepal and Sri Lanka so that the moment Indian market is liberalised they can easily establish their venture in India. Amazon is also targeting home entertainment segment as it bought Videogame Studio Double Helix Games.

Mobile games have also become popular world over, including India. The market size for online games and mobile games is tremendous. There are very few players as on date in the mobile gaming industry of India. However, these players have to resolve many techno legal issues before they can establish their businesses in India. These include mobile payment compliances, payment gateway and POS terminal service due diligence, websites development compliances, Internet intermediary obligations, cyber law due diligence (PDF), etc. Presently many mobile application developers are violating Indian laws and may be prosecuted in the near future.

Perry4Law strongly recommends that online and mobile gaming entrepreneurs and businesses in India must ensure techno legal compliances before launching their respective ventures in India. Avoiding these techno legal compliances would prove counter productive in the long run.

Andhra Pradesh CID Requests Cert-In To Block Playwin’s Online Lotteries Website In AP

Andhra Pradesh CID Requests Cert-In To Block Playwin’s Online Lotteries Website In APOnline gambling and gaming is a very lucrative field and it is attracting the attention and interest of both national and international players. However, we have no dedicated online gambling laws in India and the legal jurisprudence in this regard is still evolving. Both the Indian government and law enforcement agencies of India are trying to tackle technology related crimes and offences in India but without much success.

Recently, the Tamil website Savukku was ordered to be blocked by Madras High Court. However, immediately after the order, the website was openly available by using proxy URLs. As per media reports, the Crime Investigation Department (CID) of the Andhra Pradesh police had sought a ban on the website of “Playwin” which has allegedly been selling online lotteries banned in the state.

While many believe that it would be an easy ride for Playwin in this regard yet this is not as simple as it is appearing. As the matter involved information technology and the website has an online presence, the issues of internet intermediary liability and cyber law due diligence (PDF) would also arise. These issues would not be easy to be countered by Playwin. Recently the 99Acres.com and olx.com/olx.in found themselves in a fix for possible violation of cyber law due diligence and Internet intermediary liability of India. Playwin cannot take this issue lightly in the near future.

Almost all of the online poker websites in India are violating one or other laws of India. Although online gaming market in India is booming yet regulatory compliances cannot be ignored. It seems online gaming and online gambling industry of India is not considering regulations while conducting their businesses in India.

In the present case, CID Additional Director General of Police T Krishna Prasad said that Sikkim government and its marketing agent (Essel Group Lottery Company) organise online lotteries in the lottery free zone states including Andhra Pradesh and the Essel Group Lottery Company sells online lotteries through their website. Accordingly, a letter has been addressed to the Director, Indian Computer Emergency Response Team (CERT-In) at New Delhi, with a request to block the operations of the website in Andhra Pradesh, which is a lottery free state, the CID chief said in the statement. The public has been cautioned not to get involved in such lotteries since it is a banned activity in Andhra Pradesh, he said.

The provisional and regular licence under the Sikkim Online Gaming (Regulation) Act, 2008 can be granted but they are not enforceable around the India. These licences have their own territorial and other legal limitations. The state of Andhra Pradesh is agitating one such transgression upon its territorial and legal rights. Let us see what legal explanations would be provided by Playwin to escape from the blocking threat.

Online Poker Laws In India Are Flouted By Poker Websites

Online Poker Laws In India Are Flouted By Poker WebsitesPerry4Law is frequently asked questions like is it legal to play online poker in India? We are also frequently approached regarding the legality of opening an online poker website in India. There is no straight forward answer to this complex question. The truth is that opening of an online poker website and playing online poker in India may be both legal and illegal depending upon the facts and circumstances of each case.

There are no dedicated online poker laws and regulations in India. However, online poker activities are governed by multiple laws of India and all of them need to be duly complied with to run a legal online poker activity. Most of the online poker websites in India are violating Indian laws and may be prosecuted as well in the near future. This is partly due to lack of awareness and partially due to indifference of Indian government to bring suitable policy reforms in this field.

The laws and regulations for online gambling and online gaming in India are scattered under different statutes. Similarly, the laws pertaining to online poker are also scattered under different legislations.

We believe that opening of a legally sustainable and legal online poker website in India is a continuous process. One cannot simply start a website and offer online poker games in India. The ultimate test of legality of an online poker website in India is whether it is complying with different applicable laws of India. This, unfortunately, is not happening presently and like Bitcoins the online poker websites may found themselves on the wrong side of law very soon.

Laws And Regulations For Online Gambling And Online Gaming In India

Laws And Regulations For Online Gambling And Online Gaming In IndiaMany of the Perry4Law’s clients had asked whether online gambling is legal in India or not? There is also a general confusion regarding online gaming and online gambling regulatory requirements in India. Online gambling laws in India are totally different from online gaming laws of India. Further, online betting laws in India are also differently applicable to different situations. India is also contemplating formulating anti match fixing laws to prevent illegal online betting and match fixing in various games.

Similarly, lottery laws in India are different and they apply differently in different states of India. One state may refuse to allow sale of lotteries of a different state in its jurisdiction. Recently, Kerala refused permission to Future Gaming Solutions India Private Ltd to sell Nagaland lotteries in the state. The state of Sikkim grants provisional and regular licence under the Sikkim Online Gaming (Regulation) Act, 2008.

Since online gambling essentially involves use of information and communication technology (ICT), conflict if laws are bound to arise. An online gambling or online poker website may be legal in one country but it may be illegal in another country like India. Any entrepreneur who wishes to explore multiple markets around the world must keep in mind the conflict of laws aspect of online gaming industry.

The online poker laws in India have also evoked much interest from both national and international stakeholders and entrepreneurs. Few of them have even considered using Bitcoins for online gambling and online gaming purposes. However, it is of utmost importance that an online poker website in India must be legally opened and managed in a lawful manner from time to time. There are very specific legal requirements regarding opening a legal online poker website in India.

The online gaming market of India is fast booming but regulatory compliances are still to be adhered to. For instance, compliances in the field of encryption, cloud computing, cyber law due diligence (PDF), Internet intermediary obligations, payment gateways, mobile applications development, online gaming websites development, etc are still not taken care of by various online gaming and online gambling websites and entrepreneurs. Recently, the Mumbai Crime Branch busted an online gambling network spreading across India.

Ignoring the techno legal requirements for establishing online gambling and online gaming business and website in India could prove fatal in the long run. Perry4Law strongly recommends that online gaming and online gambling entrepreneurs must duly comply with techno legal compliances before launching their project and website.

Delaware And Nevada Signs Pact To Allow Both States To Play Online Poker Against Each Other

Delaware And Nevada Signs Pacts To Allow Both States To Play Online Poker Against Each OtherOnline poker is passing through an interesting phase in Unites States (U.S.). However, it is still to be seen whether online poker would be banned or allowed in U.S. New Jersey has reported a good beginning for online gambling within the state. On the down side, Merge Gaming suspended online poker accounts in New Jersey and Delaware for security reasons.

Now it has been reported that Delaware Gov. Jack Markell and Nevada Gov. Brian Sandoval on Tuesday signed the country’s first gambling agreement that will allow people in both states to play online poker against each other.  The governors described the agreement as the first of its kind and said they hoped other states, like New Jersey would join.

The technology is not yet developed, so it will take some time for multistate online poker to be up and running, the governors said. But the agreement signed Tuesday gets “the legal piece” taken care of, Markell said. The agreement with Nevada, currently limited to poker, is “a natural next step to make sure our gaming industry remains on the cutting edge,” Markell said. A bigger pool of players will be more attractive to potential players, Markell said. People would need to be physically present in either state to participate, no matter where they live, the governors said.

The online gambling and betting laws in India are also changing.  Many stakeholders have approached Perry4Law so that they can establish online poker and online rummy website by remaining on the right side of the laws.

We need dedicated online gambling laws in India that can clearly demarcate the rights and obligations of various stakeholders in this regard. However, till then the stakeholders must keep in mind various applicable laws of India especially the cyber law due diligence requirements (PDF).

Online Gaming Market In India Is Booming But Regulatory Compliances Cannot Be Ignored

Online Gaming Market In India Is Booming But Regulatory Compliances Cannot Be IgnoredOnline gaming industry in India heading towards a big success. Amazon is also targeting home entertainment segment and in order to do so it has bought videogame studio Double Helix Games. This shows the seriousness of technology companies to explore the online gaming industry of India.

However, along with the commercial challenges, techno legal regulatory compliances would also be required to be fulfilled by various online gaming entrepreneurs in India. There are many legal risks for online gaming website developers and designers in India. Similarly, online poker websites in India are violating Indian laws and they may be prosecuted in the near future. This is more so regarding the legal issues of e-commerce in India that are grossly ignored by various stakeholders in India.

Indian laws have prescribed stringent punishment for mobile application developers, websites developers, mobile payment service providers, etc. As per the Information Technology Act, 2000 the Indian and foreign online gaming companies and gaming providers in India are Internet intermediaries and they are required to comply with cyber law due diligence requirements (PDF) as well.

Even technology companies have started taking note of these laws. Google’s online defamation case is still pending before the Supreme Court of India. Similarly, Apple removed Blockchain application from its app store due to legal concerns pertaining to Bitcoins across the world.

Cubeia has recently decided that it would support Bitcoins for its business to business poker network. This would raise many techno legal issues as use of Bitcoins and Bitcoins exchanges in India is full of legal risks. The taxation liability of online games in India is also maturing.

Besides techno legal issues, online gaming providers would also be required to introduce the element of “localisation” to make their online games successful. Text translation, dialogue dubbing and character outfits are among the most common tweaks in the “localisation” work by firms wanting to capitalise on Asia’s booming online gaming market. However, the term localisation is not confined to mere commercial aspects but it covers legal issues as well. This means that local laws are also required to be complied with by Indian and foreign online gaming service providers.

Thus, online gaming market in India is booming but regulatory compliances cannot be ignored by online games providers. This is more so if these games providers are contemplating seeking foreign investments in Indian ventures as cyber law due diligence for foreign investors would be the norm in India in near future.

Amazon Targets Home Entertainment Segment By Buying Videogame Studio Double Helix Games

Amazon Targets Home Entertainment Segment By Buying Videogame Studio Double Helix GamesEntertainment and media industry is fast growing world over. The growth and challenges of entertainment and media industry of India have already been outlined by Perry4Law in its research report. We have also outlined the legal issues that entertainment and media industry of India would be facing in the near future. India is also witnessing a growing interest in online gaming segment that is full of legal risks and compliance requirements.

It has been reported by TOI that Amazon would be buying a California-based videogame studio named Double Helix Games. The studio’s history dates back nearly two decades and it has created titles for play on major videogame consoles as well as on personal computers. Some have indicated that this may be an attempt of Amazon to release its own console for home entertainment. Amazon has not yet disclosed financial terms of the deal.

“Amazon has acquired Double Helix as part of our ongoing commitment to build innovative games for customers,” a company spokeswoman said. Speculation in gaming industry circles for several months has suggested that Amazon is preparing its own game console, possibly using Android operating system. Microsoft and Sony in November hit the market with new generation consoles, Xbox One and PlayStation 4 respectively, in a battle to be at the heart of digital home entertainment in the internet age.

For Indian e-gaming and e-sports market, companies like Amazon, Microsoft and Sony have to do much more than putting in place appropriate hardware and software. Though we have no dedicated e-sports and e-gaming laws and regulations in India yet we have provisions under different laws that govern and regulate e-gaming and e-sports related tournaments and activities in India.

Tax Laws And Liability For Online Poker Websites In India

Tax Laws And Liability For Online Poker Websites In IndiaOnline poker industry in India is passing through a stage of transformation. The online poker website owners and entrepreneurs are still considering the legality of playing online poker and opening online poker websites in India. Even the liability of websites developers and managers of online poker websites has been outlined in India.

Nevertheless, the online poker websites in India are heading towards legal troubles as they are not complying with Indian laws. Use of Bitcoins by online poker websites and other stakeholders has further raised the legal bars. When even the Bitcoin exchanges of India are under regulatory scanner, individual online poker websites experiment with Bitcoins is really risky. Even Apple has removed Blockchain application from its app store to ensure compliances with laws of different jurisdictions, including India. Apple’s plan to launch mobile payment service through touch ID must also be judged on similar considerations.

As more and more foreign companies aim at exploring Indian markets, they have started paying attention to Indian laws. Indian courts are presently analysing whether Google is liable to pay tax in India or not? The issues pertaining to income tax liability of websites like Google, Facebook, Twitter, etc would also arise in India in near future. The online poker websites and their players are also required to comply with Indian income tax and other tax related laws.

For the purposes of computing taxes under Indian laws, there is no difference between a legal and an illegal income. Thus even illegal betting and gambling winnings would be liable to be taxed under Indian laws. The distinction of skills versus change is irrelevant to decide the liability if tax under Indian laws. Depending on the Double Tax Avoidance Agreement (DTAA) between India and other countries, some activities may be exempt from double taxation. However since gambling does not figure in the DTAA, it may be taxed in many countries.

Thus, not only the online poker websites must be legally running in India but they must also be in strict compliance with Indian income tax laws. The Income Tax Act, 1961, Foreign Exchange Management Act (FEMA) 1999, Anti Money Laundering Law, Information Technology Act, 2000, Indian Gambling Act, etc would collectively govern the legal liability of online poker websites in India.

Ignoring the internet intermediary liability and cyber law due diligence (PDF) by online poker entrepreneurs in India can be legally fatal. There only one or two online poker websites in India that are complying with these legal requirements. The online poker websites are also required to ensure that their payment gateways are duly approved by the Reserve Bank of India (RBI). Cyber due diligence for Paypal and online payment transferors in India must also be ensured. How many online poker websites are following these regulatory requirements is still to be tested by various authorities of India.

Merge Gaming Suspends Online Poker Accounts In New Jersey And Delaware For Security Reasons

Merge Gaming Suspends Online Poker Accounts In New Jersey And Delaware For Security ReasonsA few days before we covered a story titled will online poker be banned or allowed in the United States of America? The article covered the contemporary online gaming and gambling environment prevalent in U.S. Some states in U.S. have already allowed online gaming and others may also be contemplating doing the same. A good start for internet and online gambling in New Jersey has already been reported.

However, online gaming enthusiastics in U.S. are also facing technical and legal difficulties. According to Poker News Report, this weekend, hundreds of online poker players in New Jersey and Delaware tried to log in to play poker on their Merge Gaming skin (Carbon Poker, BetUSA, Sportsbook etc.) and discovered that their accounts had been suspended for “security reasons”.

After several players had contacted their site’s customer support, it became clear that the accounts were being suspended “as per restrictions set in your state” with no prior warning and with no procedures in place to facilitate the withdrawal of players´ bankrolls.

This is a scary situation that has been created due to inadequate and improper online gaming and gambling laws in various states across the U.S. For instance, if players have deposited cash or its equivalent like Bitcoins at an online poker website or a platform like Merge Gaming and the site/platform suspends or deletes any account, there is no mechanism to get the refund in such a situation. It seems the online poker players have to read in between the lines and fine prints of terms and conditions of various websites/platforms to approach only those online poker websites that are fair and legal risk free in their dealings.

It is claimed that Merge Gaming is complying with the legislation that was introduced to regulate online poker in New Jersey and Delaware, which explicitly prohibits the operation of an unregulated online gambling site. Recently, ISPs in United Kingdom refused to display warning pages for unregulated online gambling websites. However, stakeholders in U.S. seem to be more compliant in this regard.

On the other hand, the Indian online gaming industry is maturing and it is even legal to play online poker in India if proper laws and regulations have been complied with. Even Cubeia is exploring Indian online gaming market with additional payment options. For instance, Cubeia would support Bitcoins for its business to business poker network and it may explore this possibility in India as well.

A new trend in the field of online gaming and gambling industry is to accept Bitcoins as an addition payment mechanism. However, the legality of Bitcoins is still not clear in many jurisdictions.  Even the Bitcoin exchanges and Bitcoins websites operating in India must comply with Indian laws to be legal. International online gaming enthusiastics and entrepreneurs must explore Indian markets for their legal playing pleasures and ventures.

ISPs In UK Refuse Insertion Of Warning Pages For Unlicensed Gambling Sites

ISPs In UK Refuse Insertion Of Warning Pages For Unlicensed Gambling SitesOnline gambling legal environment in the United Kingdom (U.K.) is fast changing. Recently, the U.K. Gaming (Licensing and Advertising) Bill Passed the Third Reading in the House of Commons. The Gambling (Licensing and Advertising) Bill of United Kingdom 2013 (PDF) is an attempt on the part of U.K. to streamline online and remote gambling in UK. It is accompanied with the Pre Legislative Scrutiny Of The Draft Gambling (Licensing And Advertising) Bill Sixth Report of Session 2012–13 Volume I (PDF) and Pre Legislative Scrutiny Of The Draft Gambling (Licensing And Advertising) Bill Sixth Report of Session 2012–13 Volume II (PDF). UK MPs have debated remaining stages of the Gambling (Licensing and Advertising) Bill 2013- Third Reading Dated 26 November 2013 (PDF).

In a related development, the British government’s attempts to help protect users against illegal online casinos has been slowed down after Internet service providers (ISPs) in the country denied requests to insert “warning pages” on gambling sites that are unlicensed in the U.K. The warning pages would act to alert users to the unlicensed nature of the site they are accessing, much as warnings are enforced on sites with pornographic content which advise users of illicit images.

To give effect to their intention, the Gambling Commission that regulates commercial gambling in the U.K. met with ISPs like BT and TalkTalk hoping that the ISPs would agree to the so-called “splash pages”. However, the ISPs refused to cooperate and have insisted on a court order or primary legislation to enact the move before they will take any action.

Those close to the talks between the different bodies have stated that the government’s request which was put forward to the Internet service providers illustrates that the Gambling Commission is having difficulty clamping down on unlicensed and offshore gambling websites. This is natural as well as due to conflict of laws in online gambling field.

While the Commission may have jurisdiction over commercial gambling within the UK, they have no authority over sites being operated overseas which can be accessed by UK punters, and can therefore offer little protection to residents in Britain.

The Commission’s scramble for help from the broadband suppliers comes after new legislation which will see tax and licensing dependent on where the customer lives, rather than where the operators are located, which many licensed operators believe will go unenforced due to an inability to regulate unlicensed operators.

The stumbling blocks that the Commission is tripping over just adds further evidence to the difficulty faced by governments when trying to regulate the Internet, as local laws and regulations are frequently unenforceable in relation to offshore companies, which also realise they can often get away with noncompliance.

Will Online Poker Be Banned Or Allowed In The United States Of America?

Will Online Poker Be Banned Or Allowed In The United States Of AmericaMany states of the United States are exploring the option of allowing playing online poker within their jurisdictions. Some of them have already started allowing the same. For instance, a good start for Internet and online gambling in New Jersey has already taken place.

However, there are some aberrations as well when it comes to allowing use of Bitcoins for gaming and gambling in U.S. It has been reported that two Las Vegas casinos would start accepting virtual currency known as Bitcoins. However, this is a tricky situation as use of Bitcoins is legally risky in many jurisdictions including India. Even Bitcoins exchanges in India have been facing legal actions in many cases. Recently, the E-Sports Entertainment LLC (ESEA) entered into a consent judgment for creating ESEA Botnet and violation of CFA and CROA.

For the time being, there seems to be no clarity regarding playing of online gaming an online gambling in U.S. This is more so when Bitcoins are used for such playing. The Poker News Daily has reported that though Americans are free to play online poker in three states yet efforts in the direction of legalising and regulating online poker are also on rise.

In fact, a letter has been sent to state Attorneys General calling for an outright ban on online poker. The letter is divided into two parts. The first is a plea from Chris Koster, Missouri’s Attorney General, Jon Bruning, Nebraska’s Attorney General, and Alan Wilson, South Carolina’s, to their fellow state Attorneys General from around the country, urging them to sign the attached letter to the Chairmen and Ranking Members of both the Senate and House of Representatives Judiciary Committees. The Attorneys General also want the federal government to ban online gambling in the three states – Delaware, Nevada, and New Jersey – that have already legalised and regulated it.

That letter asks Congress to make online gambling, including poker, illegal. In December 2011, the U.S. Department of Justice was seized with the question whether Use of the Internet and Out-Of-State Processors to Sell Lottery Tickets Violates the Wire Act (PDF).  The Department said that the Wire Act outlawed only online sports betting, not all online gambling.

It seems the issue is not going to die very soon just like in India. The legality of online poker in India is still not clear and it is a grey area. Any entrepreneur who wishes to start an online poker business in India has to comply with Indian laws to the best possible extent. Otherwise, he may find himself on the wrong side of the law.

Good Start For Internet And Online Gambling In New Jersey

Good Start For Internet And Online Gambling In New JerseyRecently the State of New Jersey allowed playing of online gambling within the State. The first week of online gambling in New Jersey has been reported to be successful and casino regulators are relieved with this positive development.

It has been reported that during the week 37,277 accounts had been set up, enabling people to win or lose money on card games, table games and slots, all from computers or smartphones.

That, of course, was the whole point of New Jersey’s law making it the third state to legalize Internet gambling, after Nevada and Delaware. It is designed to bring new money to Atlantic City, whose 12 casinos have been struggling with increasing competition from casinos in neighboring states.

Six casinos, the Borgata Hotel Casino & Spa, the Trump Taj Mahal Casino Resort, Trump Plaza Hotel and Casino, the Tropicana Casino and Resort, Bally’s Atlantic City and Caesars Atlantic City, offer online gambling. The Golden Nugget Atlantic City is expected to join them within a week.

One of the biggest problems many users experienced at the start of the test period was being rejected by Geolocation filtering technology designed to verify that they are within New Jersey’s borders, a key requirement of the law. The Geolocation technology, which uses data including the identification of a computer’s Wi-Fi network and the location of reception towers near a cellphone, is working as it should, according to regulators and technology providers.

Anna Sainsbury, CEO of GeoComply, said adjustments to the technology used by most of the New Jersey casinos offering Internet gambling have reduced the “false negative” rate to about 10 percent. That means only one in 10 users will wrongly get an error message saying they are not in New Jersey, even though they are. That is 25 percent below the level of false negatives Nevada experienced when it launched online gambling earlier this year, she said.

Sainsbury said the technology is now accurate “to within a few meters”, and most users along the state’s borders should be able to log on and gamble. Before the launch, several technology providers said they deliberately set their electronic fences back an unspecified distance from the border to guard against someone in New York or Pennsylvania being able to gamble in New Jersey.

The biggest problem now facing would-be online gamblers is funding their accounts. Credit card companies are uneven in their approval rates of transactions into gambling accounts, with MasterCard approving nearly eight times the amount Visa was during the first week, regulators said. Direct bank transfers were the most successful means to fund accounts in the early going, they said.

The UK Gaming (Licensing And Advertising) Bill Passes The Third Reading In The House Of Commons

The UK Gaming (Licensing And Advertising) Bill Passes The Third Reading In The House Of CommonsOnline gaming and gambling is witnessing a regulatory overhaul world over. While some countries like Singapore plans to ban online gaming and enact laws against online gaming by remote companies yet other countries like United Kingdom are working in the direction of allowing such activities.

The Gambling (Licensing and Advertising) Bill of United Kingdom 2013 (PDF) is one such attempt on the part of UK to streamline online and remote gambling in UK. It is accompanied with the Pre Legislative Scrutiny Of The Draft Gambling (Licensing And Advertising) Bill Sixth Report of Session 2012–13 Volume I (PDF) and Pre Legislative Scrutiny Of The Draft Gambling (Licensing And Advertising) Bill Sixth Report of Session 2012–13 Volume II (PDF). UK MPs have debated remaining stages of the Gambling (Licensing and Advertising) Bill 2013- Third Reading Dated 26 November 2013 (PDF).

The Bill was introduced into the House of Commons on 9 May 2013. The Bill makes provision about the licensing and advertising of gambling. Under the Gambling Act 2005 of UK, it became possible, for the first time, to offer “remote gambling” from equipment based in Great Britain. The Act defines remote gambling as gambling where customers participate through the use of “remote communication” such as the Internet, telephone, television, or radio.

The Gambling (Licensing and Advertising) Bill would amend the 2005 Act so that all remote gambling operators would be required to obtain a licence from the Gambling Commission to enable them to transact with British customers and advertise in Britain.

The Bill requires all offshore online gambling operators with customers in the UK to hold licences and pay taxes. Online Casinos has reported that Helen Grant, the U.K’s Culture Minister, commented, “The Bill is a prudential measure which will provide greater protection for consumers based in Great Britain,” she said. “It will tighten current legislation to ensure that all remote gambling, whether provided in Britain or overseas, is a licensed activity subject to the Gambling Commission’s standard and controls.”

As the legislation proceeds to the House of Lords it is very likely the bill will be passed and become law. The law is expected to come into effect by the spring of 2014. . The Minister also said she thinks this legislation will be a benefit to gambling customers in the UK due to a strict new set of guidelines and licensing requirements for online gambling firms from offshore.

According to Poker Update an aspect of the Bill that has gained widespread coverage is the point of consumption tax that would be introduced should the Bill be enacted into law. That tax would be put onto offshore online gaming companies who have UK-based customers who use their product within the UK’s borders.

The current point of consumption tax on Gross Gaming Revenues in the UK stands at 15 percent and would be the tax imposed on companies which are affected by this bill. The tax has attracted criticism from some sections of the online gaming industry, especially from Gibraltar, which is the base of a number of gaming companies due to its low taxes and low business costs.

Such companies and industries may be adversely affected by the bill, especially if it means paying more taxes and other costs associated with being licenced to operate in the UK. While that could end up being the case, the bill does somewhat legitimize online poker and gaming and shows that the UK government recognises that many of its people engage in it.

Singapore Plans To Ban Online Gaming And Enact Laws Against Online Gaming By Remote Companies

Singapore Plans To Ban Online Gaming And Enact Laws Against Online Gaming By Remote CompaniesOnline gaming and gambling industry is witnessing a transformation stage these days. Traditionally various nations have adopted a zero tolerance towards online games and gambling and the laws of most of the nations prohibit online gambling.

However, online gaming and gambling is a potential source of revenue and many small nations are primarily depending upon the revenue generated through online gaming and gambling for their continued growth. So much are the stakes involved that Antigua successfully brought an action against the United States at WTO for banning the Antigua’s online gambling activities in US.

However, online gambling is still frowned in many jurisdictions. For instance, Singapore is contemplating banning of online games by local as well as distance online game service providers. According to Poker Update, this declaration came during the Third Singapore Symposium on Casino Regulation and Crime on Thursday. This was made clear by the Second Minister for Home Affairs S Iswaran as he informed that the Singaporean government was concerned about the potential negative effects they believed online gaming had on those who engaged in the activity. “The nature and design of the games, especially poker and casino-type games, lend themselves to repetitive play and addictive behaviour,” he said.

While he did not give particular examples of that occurring in Singapore, the minister did point out that online gaming had been rising in popularity in the Southeast Asian city-state in recent years. It is believed that the online gaming market in Singapore was worth as much as SG$376 million (around US$299.6 million).

The increasing prevalence of online gaming in the country led Iswaran to state that the government has aimed to put forward laws against online gaming by remote companies. “As an extension of our current laws, the government intends to restrict remote gambling by making it illegal unless there are specific exemptions,” he said. “We will introduce new laws to give our enforcement agencies the powers to act against facilitators, intermediaries and providers of remote gambling services.

“We will introduce measures to block access to gambling websites, block payments to remote gambling operators, and prohibit advertisements promoting remote gambling.” It is unclear when exactly the Singaporean government will move forward with the aforementioned restrictions, laws and measures. However, the intention to introduce them is not such a major surprise.

The country’s government resisted allowing casinos and gaming areas to be established in Singapore until the last decade. It currently implements strict rules on Singapore’s two casinos and Singaporean citizens who wish to frequent them. That history of tight control on gaming is what makes the latest aims toward banning online gaming unsurprising.

Is Use And Dealing In Bitcoins Legal Or Illegal In India?

Is Use And Dealing In Bitcoins Legal Or Illegal In IndiaBitcoins are gaining worldwide acceptance among the digital communities and netizens. They are also becoming an acceptable mode of payment among the e-commerce, online gaming and online gambling industry. Many enthusiastics in India has started accepting Bitcoins for various purposes without realising that use of such Bitcoins in India may be illegal and punishable.

The Central Government and Reserve Bank of India (RBI) have the powers to issue bank notes and coins respectively. Thus private individuals or companies cannot issue bank notes or coins unless authorised by the Central government or RBI. However, till now neither the Central Government nor the RBI has authorised any person or institution to issues, use, generate, mint or mine Bitcoins in India.

RBI has not yet formulated regulations to govern trading or profits generated from Bitcoins. RBI does not consider Bitcoin legal tender and, therefore trading in Bitcoin is not legal. Obviously, there cannot be regulations from RBI for an illegal activity. People who use it, do so at their own risk and responsibility. Regulators are studying the impact of online payment options and virtual currencies to determine potential risks associated with them.

Some guidance can be obtained from the Indian virtual currency schemed issued by RBI. However, Bitcoins, their functionality and legality of use in India is still a grey area. The Information Technology Act, 2000 (IT Act 2000) is the cyber law of India that governs the online acts or missions in the Indian cyberspace. The IT Act 2000 prescribes cyber law due diligence in India and the Internet intermediary liability in India.

RBI believes that the unregulated link between virtual currency (if permitted), and traditional currency with a legal tender status poses challenges as the complete control over the differently denominated virtual currency is given to its issuer, who governs the scheme and manages the supply of money at will.

Under some category of virtual currency schemes which provide for bidirectional flows, it acts like any other convertible currency, with two exchange rates (buy and sell). In such schemes, the virtual currency can be used to buy not only the virtual goods and services, but also to purchase real goods and services. Virtual currency schemes are different from electronic money schemes as the virtual currency being used as the unit of account has no physical counterpart with legal tender status.

A virtual currency scheme may also be designed to compete with traditional currencies used for international trade. The absence of a distinct legal framework implies that the traditional rules under financial sector regulation and supervision, including the institution of central banks, are not involved in the case of virtual currency.

RBI has also prescribed that only banks which have been permitted to provide Mobile Banking Transactions by it shall be permitted to launch mobile based prepaid payment instruments (mobile wallets and mobile accounts).

In short, the dealing in Bitcoins in India is still a “grey area” and it is not safe to consider it “strictly legal”. Till the time Indian government or other regulatory authorities of India make use and dealing of Bitcoins legal in India, the use of the same in India is at the own “legal risk” of concerned person or institution.

Anti Match Fixing Law Of India In Pipeline: But What About Online Gambling And Betting?

Anti Match Fixing Law Of India In Pipeline But What About Online Gambling And BettingGambling laws in India are outdated and colonial in nature. They have been drafted many decades before and they need urgent rejuvenation keeping in mind the growing use of information and communication technology (ICT).

For instance, when gambling laws of India were drafted, the lawmakers of India could not foresee the possible advent of online gambling in India. As on date we have no dedicated online gambling laws in India. The online gaming and betting laws and regulations in India are still in a nebulous state and in most cases it is illegal to indulge in online gaming and betting.

The recent match fixing scandal has opened the eyes of Indian government and it has decided to pass a law to curb such evil practices through a law. The same may be introduced in the monsoon session of the Indian parliament.

While doing so the Indian government must not miss the chance to regulate online gambling and betting in India as well. Presently many websites have been offering online gambling facilities in clear disregard of the Indian laws. There is an urgent need to clarify the legal position in this regard.

In fact, the law ministry has already started working on the proposed law and a dedicated team has been asked to look into every detail. As the head of these gambling rackets are located outside India, essential provisions in this regard must be incorporated in the proposed law.

There is also an urgent need to regulate e-commerce websites that are indulging in online gambling. In fact, the e-commerce websites in India must be regulated by Indian government whether they belong to online gambling or other e-commerce activities.

Only time would tell about the seriousness of the efforts of Indian government to curb the menace of gambling and betting in India.

Source: E-Retailing Laws And Regulations In India

Internet Gambling Laws In India

Internet Gambling Laws In IndiaRunning online businesses in India require compliance with e-commerce laws and regulations of India. There are many techno legal issues of online business in India that must be complied with before an online store or platform is opened. The exact nature of such legal compliances depends upon the nature of online business.

Surprisingly, the e-commerce compliances in India are really bad and Indian government and various regulatory bodies have not taken any action in this regard so far. For example, cyber law due diligence, Internet intermediary liability and cyber due diligence for Indian companies are some of the compulsory legal issues that have been ignored by almost all e-commerce players of India.

According to India’s leading e-commerce law firm Perry4Law, the most vulnerable categories that have opened their online shops pertain to online pharmacies, online gambling and gaming, electronics, etc. These e-commerce portals are not at all complying with the respective laws of these segments.

Even the Indian government is lax in implementing the regulatory and compliance requirements against these illegal online pharmacies, gambling portals and other similar e-commerce platforms.

In this entire mess a question that requires urgent answer is whether online gambling and betting is legal in India? According to Perry4Law, the golden rule for deciding whether online gambling in India is legal or not has to be judged by many factors that depends upon the facts and circumstances of each case and upon state to state. There are many states in India where gambling is legal and few where even online gambling and betting is legal. However, there are some states like Mumbai where online gambling is expressly prohibited and made a punishable offense. So it depends upon the state where you wish to carry the online gambling and betting business.

Then there is the rule of skills versus chance as laid down by the courts of India. As a general rule, where the game involves application of skill on the part of the player and the element of chance is minimal, the activity would be considered to be a game and not an act of gambling. However, the applicability of this test of skill versus chance may not be applicable to online or Internet games, betting and gambling as various judicial decisions pertaining to different sets of facts and circumstances and can be distinguished easily in subsequent litigations.

Finally, economic and taxation legislations like tax laws of India, anti money laundering laws, etc are also involved while operating online casinos, online gambling and betting and online gamming platforms.  The provisions of these economic legislations are very stringent in nature and can cause great detriment to the owner or operator of the online casino, gambling and betting website.

Perry4Law recommends that to be on a safer side, it is better to comply with various techno legal laws of India while opening an online gambling, gaming and betting platform rather than facing the punitive provisions of Indian laws.

Source: Techno Legal Thoughts.

Provisional And Regular Licence Under The Sikkim Online Gaming (Regulation) Act, 2008

Provisional And Regular Licence Under The Sikkim Online Gaming (Regulation) Act, 2008Sikkim is the most liberal State for allowing online gaming and betting in India. As per the Constitution of India, gambling and betting is a State Subject and States are free to enact laws as per their own requirements.

The Sikkim Online Gaming (Regulation) Act, 2008 has provided a legal framework for online gaming in India. This is a revolutionary piece of legislations as it has tried that no other State has been able to achieve. The 2008 Act has been notified (PDF) and it is now operational in the State of Sikkim. Even an authorised officer (PDF) has been appointed under the 2008 Act by the Sikkim Government.

In order to make the provisions of 2008 Act operational, the Sikkim Online Gaming (Regulation) Rules, 2009 (PDF) were formulated. Perry4Law and Perry4Law’s Techno Legal Base (PTLB) have discussed these Rules 2009, along with necessary 2009 amendments, for the larger interest of all stakeholders.

Under the Sikkim Online Gaming (Regulation) Act, 2008 there are provisions regarding granting of provisional and regular licences.

A provisional licence is first issued by the Government of Sikkim if it is satisfied that the application made by the applicant complies with all the requirements prescribed in this regard. A fee of Rs. 1 lakh must be given by the applicant and he/she/it must set up the necessary infrastructure and other requirements so as to be in a position to commence operation of online games and the sports games.

If the Government is satisfied that the applicant is fully ready to commence operations of online gaming and sports gaming activity and has complied with the stipulations prescribed in the said provisional licence and such other terms and conditions prescribed in the Act and Rules, the Government may grant a regular licence for operation of online games and sports games in Form-2A for five years on payment of a fee of five lakh rupees.

For enabling the conduct of Online Games and Sports Games specified under Rule 3 of the Sikkim Online Gaming (Regulation) Rules, 2009 the following terms and conditions shall apply:

(1) The provisional licence is issued for the specific purpose of enabling the applicant company to set up and establish the entire requisite infrastructure and other components necessary for actual commencement of online gaming and sports gaming activity.

(2) The provisional licence does not confer any right to the licensee to commence its online gaming and sports gaming unless and until all the requirements stipulated by the State Government are fulfilled and the regular licence is issued by the Government.

(3) The Licensee shall operate Online Games and Sports Games from Sikkim only.

(4) The Licensee shall commence actual online gaming and sports gaming operations, i.e., “go live” within 120 days.

(5) The licensee should make available only the games specified under rule 3 of the Sikkim Online Gaming (Regulation) Rules, 2009. If the licensee intends to include new games, prior approval of the Government must be obtained.

(6) The Licensee shall allow any Officer authorized by the Government to inspect the setup process or inspect premises from where the online games are to be operated.

(7) The Provisional licence is valid for 120 days from the date of issue and immediately on the licensee intimating in writing to the Government that it is ready to commence actual online gaming and sports gaming operations, i.e., “go live” and on such determination by the State Government that the applicant licensee has complied with the stipulations prescribed hereinabove and such other terms and conditions prescribed in the Act and Rules, the licensee may be granted a regular license for a period of five years on payment of fees of five Lakhs rupees as provided under the Rules.

(8) The Licensee shall pay to the Government a sum of one lakh rupees as Provisional License fee through a Bank Draft in favour of the Director, Sikkim State Lotteries, and submit the same before issue of the said licence.

(9) The provisional license is liable to be cancelled if the licensee violates any of the above terms and conditions and the provisions of the Sikkim Online Gaming (Regulation) Act, 2008 and the rules made thereunder.

Source: IIPS.

Is It Legal To Play Online Poker In India?

Is It Legal To Play Online Poker In IndiaThere are no dedicated laws and regulations for online poker in India as on date. Further, there are no specific judicial decisions pertaining to playing of online poker in India. Both players of pokers and websites hosting the poker games are in a fix to decide whether to play and host the poker game on a website in India. Till date the position of playing online poker in India is a grey area.

Since the area is developing there are very few cyber law firms in India and cyber lawyers who can provide effective legal support and services in this regard. The Information Technology Act, 2000 is the sole cyber law of India and very few law firms and lawyers are practicing in this novel field. Even among those practicing the cyber law field, there are only handful of lawyers who can take up the matter pertaining to online gaming and gambling in India.

Online gambling laws in India are different that online gaming laws of India. Further, online gambling and gaming laws and regulations in India and conflict principles must also be kept in mind by online poker websites of India.

According to Perry4Law, the exclusive techno legal ICT law firm of India, to start with, any online poker website of India that wishes to engage in legal business must comply with Indian laws like Indian Penal Code, 1860, Code of Criminal Procedure, 1973, Indian Information Technology Act, 2000, the Public Gambling Act, 1867, Foreign Exchange Management Act (FEMA) 1999, etc.

Taxation, money laundering and payment gateways issues must also be taken care of by those proposing to open online poker websites in India. Further, various guidelines and rules issued from time to time must also be complied with by online poker websites of India opines Perry4Law.

The crux of the legal position seems to be that if an online poker website is following the laws of India while operating in India, it is legal to play online poker in India. However, if the laws of India are breached during such online presence both the cyber law of India and other applicable state laws may be attracted.

Online gaming industry is booming in India and it is going to be a multi billion dollar industry in India.  In order to capture this market the online poker entrepreneurs must comply with all the applicable laws of India and consult some good techno legal firm before launching their websites.

Source: Techno Legal Thoughts.

E-Sports Entertainment LLC (ESEA) Consent Judgment For Creating ESEA Botnet And Violation Of CFA And CROA

E-Sports Entertainment LLC (ESEA) Consent Judgment For Creating ESEA Botnet And Violation Of CFA And CROAE-Sports Entertainment Association (ESEA) has been facing the Bitcoin fiasco for some time. Bitcoin is a secured digital currency that is in great demand these days. There is also a wider acceptance of Bitcoins as a digital currency for various purposed and for numerous goods and services.

ESEA also decided to experiment with Bitcoins in the past. However, the experiment actually resulted in violation of the laws of United States. So what exactly happened that has resulted in pressing of serious criminal charges against ESEA? The details of the case are available through the document titled E-Sports Entertainment LLC (ESEA) Consent Judgment for Creating ESEA Botnet and Violation of CFA and CROA (PDF).

According to this document,  the prosecution has argued that ESEA’s conduct constitutes deceptive and unconscionable commercial practices pursuant to the New Jersey Consumer Fraud Act, N.J.S.A. 56:8-1 et seq. (“CFA”) and unauthorized access pursuant to the New Jersey Computer Related Offenses Act, N.J.S.A. 2A:384-1 et !gq. (“CROA”).

A details analysis of this case is beyond the scope of this article and we would cover the same in our subsequent article. Sufficient is to say that ESEA secretly updated its client software with Bitcoin-mining code that tapped players’ computers to mint more than $3,600 worth of the digital currency.

Acting Attorney General John J. Hoffman, the Division of Law and the Division of Consumer Affairs has recently announced that on-line video gaming company E-Sports Entertainment, LLC, has entered into a $1 million settlement that resolves allegations it infected thousands of personal computers with malicious software code enabling E-Sports to monitor what programs subscribers were running and illegally mine for Bitcoins.

The State alleges that E-Sports created and deployed malicious software code that infected the computers of thousands of customers who subscribed to its anti-cheat services for popular on-line video games.

According to the complaint, the malicious code enabled E-Sports to monitor users’ computers even when they were not signed onto or using E-Sports services. E-Sports also created a botnet – a network of computers running malicious software — using its customers’ computers. The botnet used the computing resources of users’ computers to mine for Bitcoins, a virtual form of currency. It is estimated that, during a single two-week period, E-Sports took control of approximately 14,000 computers in New Jersey and across the nation, and generated approximately $3,500 by mining for Bitcoins.

As part of its settlement with the State, E-Sports has agreed to refrain from deploying software code that downloads to consumers’ computers without their knowledge and authorization. The company also must submit itself to a 10-year compliance program and create a dedicated page on its Web site that specifies what type of data it collects, the manner in which the data is collected, and how the information is used. E-Sports must pay the State $325,000 of its $1 million settlement obligation. The remainder is suspended and will be vacated within 10 years, provided the company adheres to all settlement terms and avoids future violations of the law.

“Consumers who subscribed to E-Sports’ video game anti-cheat services paid for protection from cheaters – not to be cheated by the very services they’d purchased,” said Division of Law Director Christopher S. Porrino. “Companies that collect consumer information and access users’ computers have a duty to ensure that protocols and procedures are in place to protect the information they collect. Moreover, no company should obtain more access or information than is necessary to engage in the legitimate operation of its business.”

“Following our $1 million settlement with PulsePoint earlier this year, today’s settlement serves as another victory for consumer privacy for New Jersey consumers and consumers across the country,” said Division of Consumer Affairs Director Eric T. Kanefsky. “Whether through the circumvention of browser settings, unlawfully mining for Bitcoins or by failing to adequately protect customers’ personal data from breaches, our office will hold accountable those companies and individuals that violate consumers’ expectations of privacy.”

However, in an e-mail addressed to Ars Technica, Eric Thunberg, the head of ESEA, has given a statement that the company had “no further comments at this time”. That statement, in part, says “We want to make it clear to our community that we do not agree with the Attorney General’s account of the Bitcoin incident. The settlement that was signed makes explicitly clear that we do not agree, nor do we admit, to any of the State of New Jersey’s allegations. The press release issued by the Attorney General about our settlement represents a deep misunderstanding of the facts of the case, the nature of our business, and the technology in question”.

We would analyse the settlement in details and would cover more issues in this regard in our subsequent articles.

Kerala Refused Permission To Future Gaming Solutions India Private Ltd To Sell Nagaland Lotteries In The State

Kerala Refused Permission To Future Gaming Solutions India Private Ltd To Sell Nagaland Lotteries In The StateThe sale of and dealing in paper based and online lotteries in India is governed by the Lotteries (Regulation) Act, 1998 of India (PDF) and the accompanied Lotteries Regulation Rules 2010 of India (PDF). The provisions of the Act and Rules must be adhered to in order to engage in, sale and purchase of real world and online lotteries in India. If the provisions of the Act and Rules are violated, criminal prosecution and imprisonment can also be there.

Further, as per Act and Rules one State is well within its right to deny the dealing and organisation of a lottery game/event by another organising State if the latter do not comply with the requirements of the Act and Rules.

In one such incidence reported by New Indian Express, Future Gaming Solutions India Private Ltd sought permission for sale of Nagaland lotteries in the State of Kerala. However, the State of Kerala refused to grant such permission citing the dubious history of violating Lottery Regulation Act and Rules in the sale of Sikkim State lotteries in Kerala by Future Gaming in the past. Besides, the Government of Nagaland has not informed the Government of Kerala about its intention to sell its lottery tickets in the State.

Santiago Martin, the prime accused in lottery fraud cases, is a director of Future Gaming Solutions. The Kerala State produced a notice before the Kerala High Court on Tuesday in this regard. The Kerala High Court disposed of a petition by Santiago Martin seeking a directive to the State Government to consider the application for the registration of promoter for the sale of Nagaland lotteries in the State.

As per the notice “It was revealed in an inquiry conducted on the sale of Sikkim lotteries that Future Gaming Solutions company had illegally printed Sikkim lotteries worth `60.65 crore in unauthorised printing presses and sold it in the State through Megha Distributors from April, 2010, to August 31, 2010,”.

“The present application for sale of Nagaland State lotteries is yet another attempt from the company to amass wealth illegally by cheating the public,” the notice said. It said the CBI had taken up 32 cases in connection with violation of the Lottery Regulation Act and investigation is going on.

The violation of the Act had wreaked havoc and led to public fury, which was felt in the State Assembly also. It is pointed out that the company did not furnish details of persons/firms involved in the sale of Nagaland lotteries. “This is a clear violation of the statutory directions issued by the Central Government,” the notice stated.

The agreement by the company with Nagaland Government was void. “If the agency sells lotteries based on the illegal and ambiguous agreement, it gives room for the distributor to play fraud as is evident in the case of Sikkim and Bhutan lotteries,” the notice stated.

Source: P4LO Blog.

Is Online Gambling And Betting Legal In India?

Is Online Gambling And Betting Legal In India

As a leading techno legal ICT law firm of India, Perry4Law is frequently approached for numerous techno legal issues. One of them pertains to e-commerce laws and regulations in India.

Recently many queries have been raised about the applicable online gambling laws and regulations in India.  We have also observed that e-commerce legal compliances in India are not followed in true letter and spirit. This may be due to lack of knowledge about applicable e-commerce laws but ignorance of laws is no excuse.

If e-commerce players do not follow the laws of the land, they may found themselves in uncomfortable situations. For instance, cyber law due diligence, Internet intermediary liability and cyber due diligence for Indian companies are some of the issues that have been ignored by almost all e-commerce players of India.

Coming back to the burning issue whether online gambling and online betting is legal in India or not? We have already covered the legality of online gambling and betting in India and other e-commerce compliance requirements in India but we would briefly cover the same once again.

The golden rule for deciding whether online gambling in India is legal or nor has to be judged by many factors that depends upon the facts and circumstances of each case and upon state to state. There are many states in India where gambling is legal and few where even online gambling and betting is legal. However, there are some states like Mumbai where online gambling is expressly prohibited and made a punishable offense. So it depends upon the state where you wish to carry the online gambling and betting business.

Then there is the rule of skills versus chance as laid down by the courts of India. As a general rule, where the game involves application of skill on the part of the player and the element of chance is minimal, the activity would be considered to be a game and not an act of gambling. However, the applicability of this test of skill versus chance may not be applicable to online or Internet games, betting and gambling as various judicial decisions pertaining to different sets of facts and circumstances and can be distinguished easily in subsequent litigations.

Finally, economic and taxation legislations like tax laws of India, anti money laundering laws, etc are also involved while operating online casinos, online gambling and betting and online gamming platforms.  The provisions of these economic legislations are very stringent in nature and can cause great detriment to the owner or operator of the online casino, gambling and betting website.

To be on a safer side, it is better to comply with various techno legal laws of India while opening an online gambling, gaming and betting platform rather than facing the punitive provisions of Indian laws.

Source: E-Commerce Laws and Regulations In India.

Online Gambling Laws And Regulations In India

Online Gambling Laws And Regulations In IndiaOnline gambling in India has aroused great interest among many e-commerce entrepreneurs of India. This is because online gambling is a very remunerative and profit oriented business. However, online gambling is also a complicated business filed as many laws and technical issues have to be resolved at the same time.

We have a central law on gambling called the 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 e-commerce laws and regulations in India are still at the infancy stage. As a matter of fact, a majority of e-commerce portals and players in India are not following the laws of the land in true letter and spirit. Surprisingly, there is a general misconception among the e-commerce players of India that for running an e-commerce website in India they need not to follow much law. On the contrary, there are well recognised legal requirements to start an e-commerce website in India and the legal formalities required for starting e-commerce business in India.

The chief among these e-commerce players are online pharmacies, online gambling and gaming portals, electronics e-commerce websites, etc. They fail to understand that use of technology has brought additional legal issues that are primarily techno legal in nature. Their continued ignorance may bring civil, criminal and financial penalties. The recent spate of FDI crackdowns by India government proves this point.

At Perry4Law and Perry4Law’s Techno Legal Base (PTLB) 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.

Source: E-Commerce Laws And Regulations In India.

Online Gambling Laws In India

Online Gambling Laws In IndiaThe online gambling laws and regulations in India is a tricky and complicated subject. We at Perry4Law receive numerous legal consultancy requests regarding legality of online gambling in India. The first question that owners of potential online gambling websites in India ask reads is online gambling and betting legal in India?

An online gambling website has to follow at least two different sets of laws. These include the gambling laws of India and the cyber law of India. Since the gambling activity is planned to be conducted through a website and in an online environment, the information technology act, 2000, which is the cyber law of India, has to be religiously followed.

There are well recognised legal requirements to start an e-commerce website in India and the legal formalities required for starting e-commerce business in India. However, in the zest of earning profit, e-commerce websites are not following the laws of India. In these circumstances, e-commerce websites frauds, offences and crimes in India have increased a lot. They are also not following the cyber law due diligence requirements of India and are liable for Internet intermediary liability in India.

E-commerce websites dealing with online pharmacies, online gamming and gambling, online selling of adult merchandise, etc are openly and continuously violating the laws of India, including the cyber law of India. However, India government has yet to take action against these offending e-commerce websites of India. The e-commerce websites in India must be regulated by Indian government as soon as possible.

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.

Source: CCICI.