Legal challenges in store for India’s online gambling ban
Lawmakers in India last month passed the Promotion and Regulation of Online Gaming Bill, which bans all real-money gaming, from poker and rummy to fantasy sports. Parliament passed the bill on 19 August. Three days later, President Droupadi Murmuon signed it into law.
The legislation bars banks and payment providers from processing transactions linked to cash games. Offenders face fines of up to Rs21 crore (US$113,000) and/or up to three years in jail. Celebrities and influencers who back real-money games would also face criminal charges.
Proponents of the ban cited the risk of gambling addiction and financial losses. India Federal IT Minister Ashwini Vaishnaw said iGaming has robbed 450 million Indians of more than Rs20,000 crore, leading to “depression and suicides” in some cases. He did not offer data to support his claims.
Meanwhile, critics of the bill insist that banning legal real-money games will drive gamblers to illegal, unlicensed operators who pay no taxes, observe no regulations and offer no player protections.
Mumbai-based gaming lawyer Jay Sayta complained to the BBC that the ban was pushed through virtually without debate. Smrita Singh Chandra, former communications officer for iGaming provider Dream11, agrees. In a LinkedIn post, she slammed the “overnight ban”, which was introduced “without transition, nuance, or consideration of economic realities”.
“Declaring a platform illegal after years of validation, taxation and judicial recognition isn’t just wrong,” she wrote. “It is deeply unethical.”
Loss of jobs, industry, tax revenue
The shutdown of gambling apps has caused upheaval in the sports world.
Forced to pull the plug on its fantasy betting platform and bracing for a 95% drop in revenue, Dream11 has terminated a longstanding sponsorship deal with the Board of Control for Cricket in India. My11Circle, partner of the Indian Premier League, has also shut down real-money gaming operations, as has Flutter. Mobile Premier League said it may need to cut about 60% of its domestic workforce.
Per industry estimates, the real-money sector in India supports some 200,000 local jobs and contributes Rs1.764 crore in yearly taxes.
Jaya Chahar, founder and CEO of JCDC Sports, told ABC Asia the ban “pushes fan engagement away from regulated Indian platforms into unregulated offshore spaces, which defeats the very intent of consumer protection”.
Attorney Nandan Kamath, founder of the GoSports Foundation, said that while the law is well-intentioned, over time it may create more problems than it solves. “The law immediately shuts down an avenue of deep digital engagement that could allay certain personal and social harms from activities that nurture addictive behaviours,” he said. “But effective enforcement against offshore and illegal operators will be key – and that’s an area where we have had limited success.”
He foresees a possible court overturn of the ban. “Rarely have absolute restraints such as bans been upheld,” he said. “The government may argue public health, social order and even national security. But courts will closely assess whether there are less restrictive alternatives.”
Meanwhile, the Supreme Court of India will hear all challenges to the ban. According to Reuters, Indian gaming company A23 was the first to throw down the gauntlet, calling the law a “product of state paternalism”. A23 says the law is unconstitutional when applied to skill games.