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.