To Regulate Or To Ban Online Gambling Games

By Author: rubix
Total Articles: 9
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Gambling has always been a part of our gaming since times immemorial, needless to remind the Indian epic, the Mahabharatha. Since then it took so many forms and shapes to be an integral part of gaming. Recently, and especially post lockdown, there has been a huge shift in the Indian gaming industry. The improvement in infrastructure facilities, the increase in internet consumption by people and the exposure for a wide range of games opened the door for online gambling and betting. This has seen the evolution of several new games like online rummy, poker, cricket fantasy games, etc and given a chance to entrepreneurs across the world to expand their territory in the Indian market with the help of game outsourcing companies like RubixQ. But are all of them legal?

In July 2020, a 20-year-old parlour employee who makes tattoos had to hang himself for not being able to pay the ₹20,000 that he lost on a gaming app. This isn’t the first time such incidents happened. The addiction to gambling, be it offline or online, has the capability of ruining a person’s life and eventually after the debts mount upon them, it can lead ...
... to any drastic decisions like suicides. It is the reason why high courts across the states like Tamil Nadu, Karnataka, Maharashtra, decided to ban online gambling games proactively before the number of such incidents rises. In September 2020, Andhra Pradesh government declared online gambling to be illegal. Instead of banning them, it made such activities an offence and people can be prosecuted when caught playing. These moves are made in a manner to scare people from gambling than preventing them altogether.

The Indian gaming laws categorize games broadly into two types – the game of skill and the game of chances wherein the latter comes into the gambling. This is the reason why Google had to pull out Paytm from the play store a while back, for violating the gambling policies and being the games of chances, whereas apps like Dream 11 are considered as games of skill. The Central government has no jurisdiction for gambling, the legislation of betting and gamblings lies in the hands of state governments and most of them have an exemption for games of skill. Recently Maharashtra government went to the Supreme Court to redefine what a game of skill is and what a game of chance is, and where the fantasy games fall under. The supreme court took up this and asked for a detailed report on it. If it passes the rule in the favour of fantasy games, that industry blooms like never before. Otherwise, they have to shut down.

Also, there’s another discussion floating around for having caps on gambling like ₹100 or ₹200 a day and there’ll be a cap for winning too accordingly. When the winnings are huge like in lakhs, the cap can increase up to ₹5,000 – ₹10,000. But then, the argument here is for the category of taxation for these games. If the winnings are in lakhs, though the companies are paying GSTs, the tax paid by winners is considerably less. So, they are looking at increasing this to a higher rate of tax for these activities.

According to research, the gaming industry in India is almost worth $150billions and in the worst-case scenario, corporates involved in it would only want regulations, not bans. For example, horse racing bettings are regulated, casinos in Goa and Sikkim are regulated. There’s another angle to this whole debate – psychological impact. There was a case where a college student of age 23, got addicted to gambling and eventually caught stealing, lying, losing control to end gambling sessions, getting unreasonably angry, etc. According to health experts, gambling is a behavioural addiction and it has its side effects of eating into the regular areas of functions. It can result in anxiety, impulse control issues, anger management issues, etc. So, with mental health being at stake, the ban is justified.

In economics point of view, legalization of these games with nuanced regulations and reasonable taxations can be effective, as governments can then have control over those activities. Otherwise, gamblings can happen in any form or manner and hoard a lot of black money that go unnoticed. There are some international examples like the UK Gambling Act of 2005 where they have a licensing regime for the 4-5 game categories. However, considering the facts that the industry is still in a nascent stage and the huge number of players, it is a strenuous task for governments to regulate the game of chances.