Hot Topics : Online Betting and Gambling Platforms Guidelines (GS-2 & GS-3 Mains)

Question: Evaluate the effectiveness of existing regulations and Supreme Court judgments in governing online gambling in India. Discuss the conflicting views presented by different court rulings regarding the legality of online games of skill versus games of chance. Suggest possible reforms or amendments needed to streamline the regulatory framework and address ambiguities in the legal interpretation.

Context

  • Ministry of Information and Broadcasting advised against promoting offshore online betting/gambling platforms on social media.

  • Reiterates Central Consumer Protection Authority (CCPA) advisory (06.03.2024) on concerns regarding celebrity/influencer endorsements.

Major Highlights

  • Prohibition: Guidelines prohibit endorsements/advertisements of activities prohibited by law (including betting/gambling).

    • Warns celebrities/influencers to avoid promoting illegal betting/gambling.

  • Socio-economic Implications: Ministry highlights the financial and socio-economic impact of online betting/gambling on consumers, especially youth.

    • Advises online advertisement intermediaries not to target such content towards Indian audiences.

  • Sensitization Drives: Social media intermediaries advised to conduct sensitization efforts among users to avoid such content.

  • Penalty: Non-compliance may lead to:

    • Removal/disabling of social media posts/accounts.

    • Penal action under applicable statutes.

  • Applicability: Guidelines apply to all advertisements (regardless of medium) to protect consumers, particularly youth.

Online Gambling

  • Participating in gambling activities over the internet (placing bets/wagers on games/events to win money/prizes).

  • Played on various devices (computers, laptops, tablets, smartphones).

  • Global market size: $63.53 billion (2022), estimated CAGR of 11.7% (2023-2030).

  • Major Types:

    • Casino games (slots, blackjack, roulette, baccarat)

    • Sports betting (football, basketball, cricket, horse racing)

    • Poker (card game played against other online players)

    • Lottery (purchasing tickets for online lotteries with large cash prizes)

Advantages of Online Gambling

  • Accessible entertainment for millions of Indians without access to traditional gambling establishments.

  • Revenue generation for the government through taxation and regulation.

  • Potential to promote tourism by attracting foreign players.

  • Responsible gambling platforms can provide tools to help players manage their activities and prevent addiction (deposit limits).

Challenges of Online Gambling

  • Addiction: Easily accessible, leading to severe financial and social problems.

  • Lack of Regulation: Enables fraudulent activities, financial loss, and compromised personal information.

  • Underage Gambling: Easy access for minors, causing psychological and financial problems.

  • Money Laundering: Potential tool for money laundering activities.

  • Cybersecurity Risks: Vulnerable to cyber-attacks, leading to theft of sensitive player information.

  • Social Isolation: Can lead to social isolation due to excessive online gambling.

Regulation of Online Gambling in India

  • Complex and varies by state, with some overarching laws:

    • Public Gambling Act, 1867: Prohibits operating/visiting a gambling house (doesn’t mention online gambling).

    • Information Technology Act, 2011 (amended): Online gambling services must be located outside India.

    • State-specific laws: Some states (Goa, Sikkim) legalized certain forms of gambling and issued licenses.

Related Supreme Court Judgements

  • Judgements provide conflicting views on legality of online games:

    • Skill-based games (horse racing, rummy) may not be gambling (Dr. K.R. Lakshmanan vs. State of Tamil Nadu (1996)).

    • Online games of chance (poker, rummy) may be gambling (Mahalakshmi Cultural Association vs. State of Tamil Nadu (2013)).

    • Some games like poker may involve skill and not be gambling (Shri Krishna Agrawal vs. State of Maharashtra (1999)).

Way Ahead

  • Regulators and policymakers need to address challenges to ensure player protection and fair, responsible online gambling.

  • Individuals need to be aware of laws in their state and participate only in legal and licensed online gambling activities.

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