Last week, a woman labourer from Odisha, living in Tamil Nadu committed suicide. She had reportedly lost Rs, 70,000 while playing the online game Rummy, and was so upset that she decided to end her life. The incident has reignited the debate around the impact of online gaming and online gambling, and whether it should be banned.
According to a 2022 report by a panel chaired by retired Madras High Court Justice K Chandru, there have been 17 deaths by suicide due to online gaming in the last three years in Tamil Nadu. The number is now believed to have increased to more than 25.
The panel was tasked with the duty of studying the adverse effects of online gambling and its impact. The panel submitted its report to the Chief Minister on June 27, after which it was discussed in the state cabinet on September 26. The 71-page report strongly advised the government to bring about fresh legislation pertaining to online games.
The Tamil Nadu government, after considering the recommendations, brought an ordinance banning online gambling and regulating online games. The decision, especially to curb Rummy, was welcomed by all political parties.
Citing the report, the Tamil Nadu Assembly in October then passed a Bill banning online gambling including games like Rummy and Poker. But as it hasn’t been signed by the governor yet, the Bill hasn’t come into effect.
In the past five years, six states including Telangana, Odisha and Nagaland banned several online games, but illegal operators continue to operate. According to the Indian Constitution, it is the states that have the authority to regulate games that involve real money. However, experts say that the need of the hour is a central law as most gaming apps are available easily on PlayStore and AppStore and can’t be removed by state laws.
Before the Constitution of India was promulgated, gambling in India was controlled by the Public Gambling Act of 1857, which was most likely derived from the Gaming Act of 1845 and the Betting Act of 1853 by the Parliament of the United Kingdom. Before independence, according to the act, public gambling and the keeping of common gaming houses was prohibited, but games of skill were permitted.
After the Constitution of India came into effect in 1950, games that involved betting and gambling were brought under Entry 34 of the State List, according to which state legislatures have the authority to make laws concerning betting and gambling. Lotteries were brought under Entry 40, List 1 of the Union List, which meant that the Indian Parliament had the authority to make laws about lotteries. Additionally, under Entry 62 of the State List, state legislatures were also given the power to make laws pertaining to the taxation of betting and gambling.
After the enactment of the Constitution, several states adopted the Public Gambling Act of 1857 with some amendments. States like Goa, Sikkim, Daman, Meghalaya, and Nagaland drafted specific laws to regulate public gambling in their jurisdictions. However, not all these states have laws that regulate online gaming as it is a relatively new sector. Some states like Sikkim, Meghalaya and Nagaland have formed laws to regulate online gaming.
There has been a significant rise in online games that involve betting in the recent past, fueled by the growth of the internet. Fantasy sports or league-based sports have become extremely popular. Players across the world and across India have taken to games like Poker, sports betting and casino games where they wager real money against other people in the digital space. Some states like Andhra Pradesh, Telangana, Odisha, and Assam have outright banned betting on fantasy sports leagues.
According to the EY Media and Entertainment report 2022, more than 35 crore Indians play online games that involve money. The majority are youth within the bracket of 18-35 and the demographics is skewed towards the younger population and towards the male population, especially in real money games.
The report states, “The count of online gamers in India grew to reach around 390 million in 2021 and is expected to reach over 450 million by 2023. Tier-III cities were a major contributor to this growth, with the top 30 tier-III cities reporting an increase of 170 percent of gamers in 2020. Rummy grew by 28 per cent and Poker grew by 23 per cent respectively in 2021. The user growth was fueled by an increase in the number of new gamers coming from northern India.”
According to the Constitution, these online gaming businesses are also protected under Article 19(1)(g), which gives individuals the freedom to practise any profession, occupation, trade or business and operate as legitimate business entities.
A recent report by ASSOCHAM and Ernst and Young revealed that online skill gaming would contribute greatly to the economy in the coming years and suggested that the government should in fact support the industry so that it can flourish. The report stated that by 2023, the size of the online skill gaming industry would reach $2 Billion in India alone, creating huge tax revenue even at such a nascent stage.
However, there are several legal challenges that are affecting the industry. One of the main contentions with regard to the legality of online gaming and gambling is whether it involves skill or is it simply a game of chance. Several gaming platforms like Rummy and Poker have been trying hard to prove that these games actually involve an element of skill.
Poker consultant and commentator Aditya Wadhwani said “Rummy, Poker and bridge are considered games of chance, that’s why they are illegal. These games of course, if you’re not playing them with skill, you’re gambling. It’s like the stock market, if you don’t know what you’re doing, you are probably going to get screwed over at some point. So that’s what their status is now. But it is actually a high skill game, so the amount of people who are successful here are on the lower side and most companies have policies but these games do involve financial risks. “Aditya represented the gaming community in a high court case in Gujarat, where his job was to explain how skill functions in Poker, to determine whether it was a game of chance or skill and had to provide evidence on the skill portion of that.
Aditya added, “Education is number one. You need to go into all of these things prepared. I like to compare it with the stock market because it is similar in terms of the risks involved. People go into it for quick money, but the reality is that if you want to do it properly, it is harder than a 9-5 job. Games like Rummy, are very aggressive with their marketing, and promise people that they will get rich. But the reality is the money that you make and the probability of getting rich in these games takes a lot of time, and volume.
“It’s not about making money in one day, it’s about making decent money after a year consistently and most people don’t understand this concept of volume, since you’re playing games that involve probability. A lot of people don’t understand that fundamental concept. As most people don’t get that they overexpose themselves, and at times where they think they have a great hand, they probably lose. That’s devastating because they’re not following proper financial management. If you’re putting a small amount of money, you can bear those losses, and realise your equity in the long run.”
Aditya also added, “There are measures in place to protect individuals. Because it is real money, there is KYC linked to your PAn, and Aadhaar. It is a fairly stringent process, but of course people can find their way around anything. However, at least with Poker sites, when you win a substantial amount of money, there is a secondary check to verify that this is in fact the account holder displayed. So there are checks and balances in place. But all systems are beatable.”
Speaking about the safety of online gaming and online gambling, Jay Satya, technology and gaming lawyer said, “The responsibility lies both on the online gaming platform as well as the individual. The person who is playing should also do it with some sense of responsibility. You have to be within your limits. A person should take it up on his own and be aware.
“There are industry bodies like the All India Gaming Federation who are managing or encouraging responsible playing, counselling them, enforcing limits both monetary and time wise. These are all aspects of regulation. Some platforms are doing it, some are not.
“At present, states have the authority to regulate gambling and betting. But most companies are outside the boundary of states, so how much can a state do is the question. Ideally, they should be regulated at the central level. There should be awareness about the risks. Counselling should also be provided, if a person feels they cannot stop the urge of this. These measures can be made stronger. KYC is also important. Income and time limit should be monitored to stop addiction.”
Another concern with online gaming is how it can adversely affect vulnerable minds, especially youth and the poor. Dhananjay (name changed on request), a Tamil Nadu based psychiatrist recalled two cases, “There was a young boy from Madhya Pradesh. He used his mother’s credit card and spent about Rs 40,000. When she realised that there was something fishy, he was not able to deal with it and committed suicide.
“There’s another story of a young adult in Bengaluru. His father caught him gaming. And he killed his father. These are chilly incidents. Do these games make room for violence? This is something we’ve tried to study. Most textbooks say that there is no long term impact of gaming on aggression.
“However, there is evidence of short term aggression due to gaming. We went to a college, most students were between the ages of 18 to 20. We found about 30 students with gaming addiction and I compared them with 60 people who don’t have the addiction. We found that those who played for longer, they had a risk of becoming addicts.
“If you spend more time with family, it gives you protection of 68 per cent from becoming an addict. If the family keeps an eye on how long a child is playing and spends adequate time with the child, the chance of him becoming an addict is less. Does gaming affect people’s lives negatively? People who are not addicts spend only about 15 minutes a day, but those who are addicts play about three to 10 hours a day. This can definitely affect studies, work, relationships with parents and partners, and physical fitness. COVID has also led to an increase in gaming among kids.”
According to a study published in the Lancet titled ‘A game of Policies and Context’, “Mental health professionals should work towards building global consensus on evidence-based, effective policy measures while advocating for a balanced public health addiction strategy. Better integration between these measures is required, including the development of an index of the addictive potential of every video game.
“An independent multistakeholder expert group could develop such an index with the information shared by video game development companies regarding use patterns and the extent of variable ratio reinforcement strategies in games. The ratings derived could feature alongside age and content warnings to inform parents and guardians about monitoring and time limits.
“Companies could modify interfaces to warn gamers of problematic gaming behaviours and adopt time outs. The current spotlight on mental health provides the best opportunity to inform policy makers and health authorities regarding the mental health of minors who play video games.”
Dhananjay added, “There are several motives why people get into gaming. Some do it as a coping mechanism, as an escape. These games are designed specifically to meet many of these needs. I am anxious about the concept of a loot box. You have to pay for some unknown object. It may be something small or big. Once in a while I may get something big, so I will keep buying more loot boxes in the hope of getting it again. Unknowingly, they’re getting into gambling.
“I’ve seen patients who have sold off all their assets, it has destroyed their lives. Our fear is that gaming shouldn’t become a gateway into gambling. There needs to be some authority to regulate these games. Once a person becomes an addict, we don’t try to make them stop gaming, our treatment will only be to ensure that he or she is able to achieve his life goals, have healthy relationships and good quality of life.”
In May 2022, the Ministry of Electronics and Information Technology, Government of India had set up an inter-ministerial task force on online gaming, hoping to come up with a framework for better regulation of the sector. The task force included several ministries such as home affairs, electronics and IT, information and broadcasting, sports ministries, revenue, industries and internal trade departments and the NITI Aayog.
According to the draft regulations, the proposed framework of the Central Regulation on online gaming should include the following: There should be a clear differentiation of games of skill and games of chance. Currently there are conflicting court verdicts about several games like Poker. A proper regulatory body is important for the industry in order to avoid multiple compliances in different states. A redressal mechanism to deal with financial safety, transparency of transactions and consumer protection. It also suggested that there needs to be an age cap for participation in real money gaming, with transparent rules and transactions.
The NITI Aayog has also stressed on the fact that advertising for gaming platforms should conform to Advertising Standards Council of India (ASCI) guidelines, where the rewards cannot be shown to be assured or a source of livelihood. Speaking about false advertising practices, Aditya said, “what a lot of people don’t realise is that the skill required takes a lot of time and most people are just trying to make a quick buck. Some of the operators also play towards this because that’s how they get acquisition.
“They make promises such as ‘zero to hero’, ‘get rich overnight’. They don’t promise it directly, because they’re not allowed to, but they imply it. In tournaments, there’s usually a guarantee, that’s the prize amount. That price code is sometimes split between the surviving people in the tournament. Say if it’s a one crore guarantee, they would say win one crore, which is not true. It’s going to be a thousand people competing to share one crore. So the advertising can be very misleading.”
