‘States separating games of skill and chance against new online gaming rules is a mistake,’ says N Venkataraman

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According to Additional Solicitor General N Venkataraman, states that are trying to separate games of skill and games of chance in the context of wagering is a mistake. Wagering is defined as putting money on uncertain events, and the new online gaming rules will ban any online real money games where winners are based on unknown outcome.

Speaking to PTI, Venkataraman said, “The new rules notified by the Centre is very clear. There is no ambiguity. Our courts have held that wagering is illegal, and any business predicated on wagering is res extra commercium that is a thing outside commerce. Such businesses cannot be carried on in India.”

The new online gaming rules say that all games that have an element of prize should be registered with a self-regulatory organization (SRO). Any game having wagering at any point will be allowed to operate or promote itself under the new rules.

Rather than trying out the rules on a constitutional basis or statutory provisions and judgements of the Supreme Court, states are stuck at games of chance and games of skill.

Stakes are uncertain, says Venkataraman

Venkataraman asked, “How do you know this ball is going to be six or four? Whether a player will be in the playing squad or not? Whether the chosen player would perform or not? How do you know you will win the game before the game is even played?”

“Stakes are today placed on these uncertainties, hoping in anxiety that the predictions turn true to reap higher rewards than the amount at stake,” he further added.

He even quoted an example of how the Honourable Supreme Court cited horse racing as a skill-based game despite the result of the race being unknown before it actually begins. In the same vein, he added that putting money on a horse race eventually leads to betting under the prevailing laws related thereto.

He also accused the industry stakeholders for creating a confusion while defending their games by bringing games of skill and games of chance while the Minister of State for Electronics and IT Rajeev Chandrasekhar explained the rules multiple times.

Result unknown in both skill-based and chance-based games

Giving an example of Teen Patti and Cricket, Venkataraman said that while Teen Patti is a game of chance and Cricket is a skill-based game, the result remains unknown. When people throw money at them, it amounts to wagering and removes the concept of skill or chance.

He also said that paying a price to participate in a competition or match is permissible but that wagering money to anticipate a game’s outcome in order to increase one’s profits is prohibited when asked about the legality of matches that charge a fee for the game and give prize money.

Talking about the impact of online real money games that involve wagering, Venkataraman said that many of them are operated offshore, and the money is siphoned out from India. As they are not bound by the tax law, it poses a threat to the fiscal infrastructure of the country.

Another senior official added that the debate over online games involves not just the legality, but also significant social impact that the government is worried about.

“There is an element of addiction amongst youth and loss of hard-earned money of citizens as well. Apart from these, possible money laundering and other aspects of crime and abuse cannot also be ruled out,” the official said.