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01 Apr 2022

The legal and regulatory environment of India’s real money gaming industry was at the centre of the conversation at SPiCE 2022, an important gathering of key stakeholders of the Indian subcontinent’s online gaming industry.

Vidusphat Singhania, Managing Partner of Krida Legal, Jay Sayta, Technology and Gaming Lawyer, Jaideep Reddy from Nishith Desai Associates, and Dibyojyoti Mainak from MPL, part of a panel at the 3-day conference in Goa, noted that the legal and regulatory landscape had changed significantly in the last 3 years.

“Covid19 led to the boom in the industry that actually brought the debate on banning,” said Dibyojyoti Mainak from MPL. Telangana had already banned gaming for stakes in 2017. 

“During the last SPiCE, none of the states (except Telangana) had discussions on banning.”

Mainak said the states, unfortunately, started treating games of skill as gambling. Vidusphat Singhania said the distinction between games of skill and chance was always outside the ambit of “gambling and betting.” 

He added that the Courts have decades back held that games of skill are a legitimate business activity.  The speakers agreed that legislation must be rational to the evil it is trying to address. 

Singhania, while referring to the Meghalaya gaming regulation, said in the last three years we went from banning discussion to positive legislation in at least one state. 

Jay Sayta, who argued before the Madras High Court in the landmark case, stated that nearly 50 hours of the hearing went into the Madras and Karnataka High Court cases. He took the audience through the grounds of challenge in the Karnataka case which includes fundamental rights, constitutional competence, and the power of states to enact a law on skill games. Once it is a game of skill, operators and players have the constitutional right to undertake the activity, he added.

Jaideep Reddy from Nishith Desai Associates said a possibility of a central law may be explored. He said it is a completely different world since the last SPiCE event in 2019 with newer formats of skill games, states trying to enact sweeping bans and failing. 

Mainak said that at the central level, the Ministry of Information Technology had recognised the difference between skill and chances games. "The sports ministry said it will consider esports included in Asian Games, but no one (ministry) wants define want are skill games and chance games."

Singhania said that before ministries decide, the issue may be settled by the Supreme Court. Adding to Singhania, Jay said, “ no one (ministry) wants to ring the bell, just pass on the bell.” He said even sports and entertainment fall under the state list and states can enact legislation under that entry as well. 

The session concluded with the panellists agreeing that the next 3 years will be crucial for the sector with cases reaching Supreme Court and a few states trying to enact regulations. 

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