India Set To Amend IT Act To Better Police iGaming Market

India Set To Amend IT Act To Better Police iGaming Market

India’s online gaming industry has blossomed in the last four years. While most businesses took a hit during 2020 due to the pandemic, the iGaming market in India continued to flourish.

Domestic and international operators boosted their gaming offerings by adding more promotions and bigger tournaments during the lockdown, resulting in an uptick in new player registrations.

While the sudden surge in online gaming traffic has been good for iGaming operators, it has also caught the attention of online gaming opponents who have filed multiple public interest litigation (PILs) in state courts to get the government to take action against iGaming operators as most India states have a ban on online gambling.

Central Government To Amend I.T Act

While most of the PILs have been addressed at the state level, the BJP led central government is now stepping in to address the growing concerns over online gambling and the top (OTT) media services.

The central government is expected to review and amend the Information Technology (I.T.) Act of 2000. The I.T. Act of 2000 was amended in 2008 when the government made changes to address video streaming and online gaming. However, the I.T. Act is still archaic and needs to be updated to cover modern technologies, including smartphones, artificial intelligence (A.I.), and virtual reality (V.R.).

India has one of the biggest smartphone markets in the world. Current stats estimate that there are now over 700 million internet users and over 1 billion smartphone users. iGaming operators have taken advantage of this and have started offering numerous forms of online games such as teen-Patti, online poker, sports betting, daily fantasy sports, eSports and slot games, and jackpot games.

States Unable To Enforce iGaming Ban

PILs fined in state courts of Tamil Nadu (T.N.), and Andhra Pradesh (A.P.) have resulted in these state governments deciding to ban online gambling.

The TN and A.P. state courts heard the PILs that pointed that young Indians were falling into gambling debt and taking their lives because there were no gambling regulations or gambling watchdog to protect players from unscrupulous operators. The court gave the state government an option to regulate the gaming industry or place a complete ban.

T.N. and A.P. state governments decided that it was easier to ban online gambling than to go through regulating and establishing a gaming watchdog. However, even though T.N. and A.P. have banned online gambling, they struggle to enforce the gambling ban.

This is because offshore operators continue to target T.N. and A.P. players as the respective state governments cannot block all of these offshore providers. So while the ban has dissuaded some iGaming operators from offering services in T.N. and A.P., many iGaming operators continue to operate freely.

The amendment to the I.T. Gaming Act is expected to make things easier for both the central and state governments to blacklist and block iGaming operators from operating without permission. We will have to wait and see what the final amendments that will be added to the I.T. Gaming Act are.

Meghalaya Legalizes Online Gambling

While A.P. and T.N. have decided to rule against online gambling, the state of Meghalaya has decided to do the opposite. The Cabinet met earlier this month to discuss the possibility of online gambling and received approval from the finance and the law departments.

Meghalaya is a small state in North East India that has a very small population. The state is heavily dependent on its tourism industry and, due to COVID-19, has suffered financially more so than a lot of other Indian states. The state government was looking at new ways to create revenue and jobs in 2021 and decided that one way to do so was to legalize online gambling.

Conrad K Sangma, Chief Minister of Meghalaya, made an official tweet of the legalization and tagged central financial minister Nirmala Sitharaman. All iGaming operators offering gaming services in Meghalaya will now have to obtain a gaming license to continue to operate in the state. Failure to obtain a gaming license will open them up to prosecution.

Will the Other States Follow Meghalaya?

Many other Indian states will soon have to make a decision like T.N. and A.P. over iGaming legalization. States like Maharashtra, Delhi, and Kerala will either have to follow T.N. and A.P.’s footsteps as their state courts have similar PILs that need to be addressed.

Will these state governments ban online gambling or take a cue from Meghalaya and legalize online gambling. We will know as 2021 unfolds.

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