Monthly Archives: July 2016

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.