INSIGHT
a spokesperson said: “We always welcome
conversation around smart, sensible
regulation that protects consumers,
operators and the industry and which
allows adults to play the games they love
in the safety of their own homes.”
Not everyone is quite so positive.
Jay Sayta, corporate lawyer and founder
of GLaws.in, a website that covers
developments in gambling laws in India,
says he takes the clarification note at
face value.
“They recommended a ban in the
first place and it was mistaken to mean
regulation. In the next paragraph they said
that if a ban didn’t work regulation could
be considered at a later point in time.
“What the Law Commission actually
meant by their clarification is that they
want a stronger law to ban everything.”
Sayta concedes, however, that the
report is “totally convoluted” and that the
Commission was looking to have it “both
ways” with its recommendations.
The Commission’s fence-sitting is
perhaps understandable, given the country
is less than a year away from an election
and none of the main political parties are
likely to make gambling a priority in the
run-up to it.
Logically, it’s hard to see that the
Commission would have bothered
to outline such specific guidance for
regulation if it wasn’t at least on the cards.
(It even outlines various specific consumer-
protection measures in the report, though
not all of these are seen as workable.)
Role of the courts
It’s worth pointing out that the Supreme
Court, rather than the government,
asked the Law Commission to investigate
the matter. While Sayta says this is
“significant in the sense that it wasn’t a
priority for the government”, Gaggar says
it may mean the courts will play a big role
in deciding how things move forward.
“I have a feeling it is not just going to be
a political story. I foresee action in the
court playing a sentinel role in this
going forward.”
Ranjana Adhikari, co-head of the
media, entertainment and gaming practice
at Mumbai-based law firm Nishith Desai
Associates, points out that there is a
relevant Supreme Court case pending in
Geeta Rani v Union of India.
“The question before the Supreme
Court is whether or not sports betting
is a game of skill and whether or not it
is already legal in India, which is the
entire debate.
to jump into the regulatory fray has
been PokerStars, experts say others will
follow suit.
Positioning for change
“Operators looking at India are conscious
that it is going to be a couple of years
before sports betting could officially be
a product for them,” says Adhikari.
“In the meantime, some are exploring
other areas to capture eyeballs; they may
be looking at entering into daily fantasy
sports, for example, because it is seen as
a game of skill in India.”
Gaggar says the report has provided
further impetus. “Since it came out,
I’ve had four companies get in touch
“The fence-sitting is perhaps understandable given
the country is less than a year away from an election”
“If the Supreme Court says it is a
game of skill it doesn’t matter if you
have legislation in place. It is above
board and you can offer it.
“It’s slightly unlikely for it to happen
in the absence of legislation but it is the
best case we have right now.”
India’s individual states have the
power to make their own laws and some
may feel emboldened by the Commission’s
report to legislate within their own borders
before it becomes a priority for central
government. This is more likely to happen
in states that have gambling regulation
in place, says Adhikari, such as Sikkim,
Nagaland and Goa.
“These states that are heavily
dependent on gaming and tourism for
their revenue might look at it as an
opportunity,” adds Adhikari.
Sikkim and Nagaland’s licensing
regimes are for online skill gaming and,
while so far the only foreign operator
to say that they would like to obtain
a licence. They are thinking that a
licensing regime is going to happen
at a central level but in the meantime
they want to get their act together at
a state level.”
Current foreign direct investment
(FDI) laws make it tricky for overseas
companies to operate in India. The Law
Commission report recognises that there
would need to be a change in FDI policy
if a licensing regime was put in place,
because foreign investment and technology
would be needed.
For foreign operators, the Law
Commission’s long-awaited report is being
viewed as largely positive, although given
the timing of its release so close to an
election those with an eye on India would
be wise to temper their expectations.
“It’s going to be a slower process than
most people anticipate,” says Adhikari.
“Everybody just needs to be very patient.”
iGB Affiliate Issue 70 AUG/SEP 2018
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