CAG points out anomalies in implementing Nagaland Gaming Regulation Law

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Due to flaws in implementation of the Nagaland Prohibition of Gambling and Promotion and Regularisation of Online Games of Skill Rules, 2016, the State Lotteries sustained revenue loss of ₹ two crore, a report by Comptroller and Auditor General (CAG) said. The report was placed before the state assembly recently.

According to CAG, royalty receivable by the State Government also remained un-assessed as the active licensees neither maintained the designated accounts nor the Department had any technical expertise to monitor and analyse the gross revenue of the licensees.

Out of 12 licensed firms, 10 firms were liable to pay a penalty of ₹31.80 lakh from the date of issue of the license to December 2020. However, only one firm (Tictok Skill Games Pvt. Ltd.) paid penalty of ₹6,575. This resulted in default in payment of ₹31.73 lakh as penalty. TicTok Skill Games  recently changed its name to WinZO Games Private Limited and operates under the brand name WinZO.

Others in the list include Baazi Networks operating various skill games under the brand Baazi.

The Government in its response  stated that there is no legal compulsion for a firm hosting online games of skill to obtain a license, much less seek renewal of their license to be able to host online games of skill. The CAG in strong words refuted this argument and said the department made no efforts to attribute revenue from gaming operations in the state.

Concluding the report, CAG advised the government: (i) to take legal steps in any court of law to stop the illegal operation of online games without renewing the licences. (ii) ensure that the licensees maintain designated accounts to resist the drainage of State revenue. (iii) recover the licence fee and penalty from defaulting license holders. (iv) also ensure that the Department utilises the latest technology and technical expertise to analyse the gross revenue of the licensees earned from the online games of skill.