New online gambling laws in India

New online gambling laws have passed in India this month.

That’s laws plural. And they’re not exactly complimentary.

Tamil Nadu bans online gambling

Last week Tamil Nadu’s state legislature passed its Prohibition of Online Gambling and Regulation of Online Games Ordinance.

The law bans online gambling in the state of Tamil Nadu – a southern Indian state with a population of around 70 million, or a little more than the entire UK population.

It prescribes pretty stiff penalties to those offering or advertising online gambling services.

Those caught advertising or inducing residents of Tamil Nadu to gamble online face prison sentences of up to a year. Providers of the online gambling services face sentences up to 3 years.

Even players are in the firing line. Penalty clause 16(1) provides…

“Any person who indulges in online gambling or plays online games of chance specified in the Schedule, with money or other stakes… shall be punished with imprisonment for a term which may extend to three months or with a fine which may extend to five thousand rupees or both.”

Online gambling is defined as wagering or betting and includes playing online games of chance. As to what online games of chance are, Rummy and Poker are given as examples. But more broadly, these can include any real money online games where:

1. the element of chance dominates over the element of skill,
2. games are presented as games of chance,
3. the element of chance can only be eliminated by superlative skill, or
4. games involve cards, dice, or wheel which work on random outcome generators.

So, live casino games are definitely off the (legal) menu for Tamil Nadu for the foreseeable future.

Centre introduces rules for regulating online real money games India wide

Around the same time the Tamil Nadu gambling ban became law, the Indian government (commonly referred to as the Centre), enacted amendments to its Information Technology Rules, 2021 to include provisions regulating online real money games.

Under the amendments such games and their providers will need to be verified and regulated by bodies known as SRB’s (self regulating bodies). A KYC process for all players will also be required.

The amendments define online real money games as, ‘an online game where the user makes a deposit in cash or kind with the expectation of earning winnings on that deposit.’

Now, a lay person would take that to include online gambling games. All of which required cash deposits with the expectation of winnings. But to receive SRB verification/approval the game must, ‘not involve wagering on any outcome’. And wagering is not defined. So whether, or to what extend traditional gambling games will fall under the ambit of these amendments remains to be seen.

Muddying the waters further, was a comment made by (Centre) Minister of State for Electronics and IT Rajeev Chandrasekhar when queried about operation of these amendments in states like Tamil Nadu, in light of their new law.

“State governments’ regulating online gambling is not required any more after the IT rules for online gaming have been notified,”

Is he suggesting the IT rules extend to regulation of online gambling games?

The Ministry for Electronics and IT have since opined that while states have jurisdiction over gambling laws, internet games (including online gambling) fall under its nationwide jurisdiction.

At this stage there seem to be more questions than answers. And it will probably be left to the court rooms around India to come up with those answers.