ONLINE GAMING: CENTRE VS TAMILNADU
1. Context
The state’s assembly passed the Tamil Nadu Prohibition of Online Gambling and Regulation of Online Games Ordinance, 2022 last October. However, in early March, Governor RN Ravi returned the ordinance for reconsideration. A few weeks later, the assembly readopted the Bill and sent it to Raj Bhavan once again
State laws on online gaming are a pain-point that many in the industry are foreseeing. They have also raised these concerns with the Ministry of Electronics and IT (MeitY), which is now the nodal agency for the sector. They are also likely to challenge Tamil Nadu’s measure in court once it is notified by the state governmen
2.Tamilnadu's law on Online Gambling
- The Bill prohibits online gambling and online games of chance played for money or other stakes
- While it specifically names Rummy and Poker as games of chance, it can go much wider in scope
- It defines online games of chance as those where both an element of chance and skill are involved, and the element of chance dominates over the element of skill; games are presented as games of chance; the element of chance can only be eliminated by superlative skill; or games involve cards, dice, or wheel which work on random event generators
- It also establishes the Tamil Nadu Online Gaming Authority and empowers it to regulate online gaming companies
- Companies that are based outside the state are required to follow specified due diligence or restrict access to prohibited games for people in Tamil Nadu
- The state’s proposed gaming authority will identify games of chance and recommend them to be included in the Schedule of prohibited games.
- It is worth noting that the state’s Governor gave his assent to the Bill hours after the legislative assembly passed a resolution against him for indefinitely withholding assent to several bills
3. Online Gaming: Centre vs Tamilnadu
- Aside from the state assembly’s resolution against the Governor, the timing of the development is also particularly significant given that his assent to the Bill comes just days after the Centre notified amendments to the Information Technology Rules, 2021, which brought in rules for regulating online real money games
- According to the Ministry of State for Electronics "State governments’ regulating online gambling is not required any more after the IT rules for online gaming have been notified"
- Online gaming companies had raised concerns around state governments passing competing legislations which could potentially go against norms prescribed under Centre’s rules
- According to MeitY gambling is a state subject, activities that occur on the Internet including online gambling and gaming fall exclusively in its domain to regulate
4. Centre's Norms for Online Gaming
- The fresh changes require the setting up of multiple self-regulatory bodies (SRBs) whose approval will be required for online games with a monetary element. Games that involve wagering on outcomes of events will not be allowed
- Online gaming companies will also have to complete a KYC procedure for users when they first make a deposit in their accounts to play a game
- KYC norms laid down by the Reserve Bank of India (RBI) for its regulated entities will have to be followed by them
- All India Gaming Federation (AIGF) challenged the constitutional validity of Tamil Nadu’s Bill at the Madras High Court. However, at the time, the state government had said that it was yet to notify the Bill as a law, following which the court had allowed AIGF to withdraw its petition with the liberty to file it once the law is in effect
Source: indianexpress
