Monthly Archives: February 2014

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.