Online Gaming Bill 2022 – clarity or ambiguity?

Online Gaming Bill 2022


The recently introduced gaming Bill that was introduced by the Lok Sabha on 1st April 2022, accurately reveals that India has approximately 442 million gamers online, with a value. of $1 billion and the industry is predicted to increase to $5 billion in 2025. With the explosive growth of the gaming business and the absence of a regulatory framework to regulate it and the whole sector has been plagued by uncertainty and is in the hands of the operative language. The proposed legislation is said to establish a strong regulatory framework to supervise the operation of gaming sites online and limit illegal gaming online.

Current Regime:

Presently, in India in entry 34, list II, the Constitution of India empowers the state to regulate gambling and betting. Gambling as a game of chance is either prohibited or severely regulated in the majority of states that are located in India. In the case of gambling online, which is based on money in the past, the judiciary has tried to discern between a game played with skill and a game of chance and online games of luck being considered gambling. However, the distinction needs to be determined on a case-by-case basis which can be very laborious. In addition, every state has its legislature for the industry of online gaming. Due to this, the gaming company must adhere to various regulations throughout the country which has created an obstacle for those operating in the field of online gaming.

So, even though the industry of gaming is growing and producing significant revenues across income levels and populations, however, it’s still filled with controversy and lacks regulation clarity. Therefore, a centrally unified law is needed for the time.

Read also – 5 best gaming sites 2022

Is the Centre has the authority to make an entirely brand new legislation?

The bill is aimed at regulating all forms of gaming online, regardless of whether it’s a sport of skill or a game of chance or a game of chance, regardless of whether it’s cash-based or not. There is no limit regarding gambling, it is the responsibility of the Central Government for formulating laws and regulations about gambling on the internet, it’s clear that gambling is on the list of state-owned businesses.

Proposed Regime:

Name of the Bill: The Online Gaming (Regulation) Bill, 2022

The goal of the Bill: is to establish an effective system that regulates the Online Gaming industry, to stop fraud and abuse as well as for other matters related to it or related. Online gaming is any game played online using electronic devices, such as smartphones laptops, personal computers, tablets laptops, tablets, etc.

Salient Highlights:

1. To establish the Online Gaming Commission (OGC) comprised of experts in the fields of technology, cyberspace enforcement, and law enforcement. The commission will be given the authority to oversee every aspect related to Online Gaming, from coming out with regulations and rules regarding gaming to the granting and the revocation of licenses, etc.

2. Imprisonment provisions to be enacted for violations of the license granted.

3. Power to make rules for the entire world to the OGC

4. The law allows for Foreign Direct Investments (including but not limited to technological collaboration) in the area of Online Gaming.

5. Override any laws that are incompatible with the intention of the Bill (once it is made it is an Act).

6. to periodically submit special reports on issues relating to tnline gaming to the Central Government.

The proposed Bill will create a unifying law for an industry that has an array of laws, some contradictory which makes it an important move in the correct direction. However, it is not without a doubt that the bill does not leave much to be addressed such as no distinction between gambling based on skill or chance and a heightened bureaucracy as a result of the absence of clear and precise methods for licensing approvals as well as data protection and grievance mechanisms, to be precise. In addition, the bill does not provide details on how it will impact the existing regulations and laws regarding this issue. The ambiguity of the bill is only going to cause confusion between central and state laws, creating a complex regulatory system.

Note: Alongside this Bill, The GoM is considering the possibility of a GST tax slab of 28% for online games. The current system tax the online game at 18 GST.

Another thing to note is that Rajasthan has recently launched the Rajasthan Virtual Online Sports (Regulation) Act 2022 to solicit feedback from stakeholders. The Bill will control online sports fantasy as well as various formats that are virtual games (VOS). Although the center has its laws to be considered the state legislation for stakeholder comments that runs parallel to it turns into a regulatory mess that affects the industry of gaming.

Authored by Garima Mitra. Co-founder Treelife Consulting

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