Gaming is not gambling, trade bodies telling govt

They contend that online card games like rummy and poker are based more on skill than chance. Karnataka banned online gambling on October 5

The gaming industry wants the Karnataka government to define ‘games of chance’ and ‘games of skill’ in the wake of a new law banning online gambling.

During the recently concluded monsoon session in both houses the state legislature, the government passed a law which the gaming industry, predominantly based in Bengaluru, believes will impact it adversely.

According to Roland Landers, CEO, All India Gaming Federation, says while the intent of the new law is something his federation fully supports, certain clauses are not clear, and end up clubbing games of chance with games of skill played for stakes.

“As the apex industry body, we have notified our member companies to block Karnataka in accordance with the law. However, we would like to reiterate our stand, since legitimate online skill gaming businesses are badly impacted,” he says.

Illegal offshore gambling operators will flourish because of the ban, he believes.

“Needless to say, our industry will challenge this in court. We must remember that the Madras High Court recently struck down a similar law in Tamil Nadu that tried to stop online skill gaming,” he told Metrolife.

Biren Ghose, Chairman, CII National Committee for Animation, Visual Effects, Games and Comics (AVGC) and president, Association of Bangalore Animation Industry (ABAI), says the government must come up with a comprehensive list of games that are allowed.

“The term ‘games of skills for money’ does not provide clarity. For example, would a game of chess where you pay a tournament fee not be permissible? Section 78 of the Karnataka Police (Amendment) Bill also brings online ‘games of skill’ under its ambit and makes taking fees illegal, but the original Act was confined only to ‘games of chance’, which is gambling,” he says.

The ban potentially encourages illegitimate platforms to thrive, he cautions.

Ghose says the Supreme Court and the High Courts have repeatedly cleared the air on what constitutes a ‘game of skill’ and a ‘game of chance’.

“The Supreme Court has ruled in M J Sivani and Others vs State of Karnataka and Others on April 17, 1995 that games, especially video games, that are preponderantly based on skill are games of skill. The Supreme Court in Dr K R Lakshmanan vs State of Tamil Nadu in 1996 further defined a game of skill as a game “in which, although the element of chance necessarily cannot be entirely eliminated, success depends principally upon the superior knowledge, training, attention, experience, and adroitness of the player.”

Landers says all games, including chess and cricket, have an element of chance and so the important point is the preponderance of skill. Nonetheless, rummy has a Supreme Court judgement to back it as a game of skill and is not covered under any law.”

Based on the observations by the courts and the Skill Games Council, he feels skill exceeds chance in online poker and rummy, fantasy sports gaming, and quizzing.

Only Sikkim has clear-cut online gambling laws, says legal expert

Dr T P Vipin, advocate and criminologist, says that any ban on online gaming may be redundant given that technology is easily available to bypass it. Dr Vipin, points to the existence of numerous sites and apps that allow anonymous gambling. “A majority of India’s online gambling market is connected with foreign entities operating outside India,” he told Metrolife. The legal landscape is complex because various states and Union territories have their own laws on lotteries and gambling.

“The existing major legislation are The Public Gambling Act of 1867, The Prize Competition Act of 1955, and The Information Technology Act of 2000. While the first bans all forms of gambling, the last applies only to online gambling. Hence, India lacks adequate laws to regulate the gambling industry. Sikkim is the only state that has implemented online gambling regulations. Under the Sikkim Online Gaming (Regulation) Act of 2008, casino fans can play various card table games online. Only Sikkim and Goa host a limited number of land-based casinos and gambling establishments,” he explains.

Not easy to catch online gamblers, say cops

A senior investigating officer with the Criminal Investigation Department (CID) couldn’t agree more. “Bringing technology under the ambit of law is the challenge. We have to prove the offence, involvement of the gadgets and prove who is using it. It is a hybrid situation where anonymity reigns supreme,” he says. The gamblers are all known to each other and use their individual accounts to transact money. They know how to exploit the loopholes in the Internet. They may also have an international network, making it difficult to take the investigation forward, he explains. Another officer, who has been on teams cracking online frauds, told Metrolife, “If the gamblers use VPN where they mask their identities, it is impossible to trace them. Getting the source and following the money trail will be impossible.” Gambling sites earn by charging a user fee and collecting commissions. And of course the money lost by the player forms a big part of earning, he says.