India is one the world’s fastest growing online markets. It is estimated that the Smartphone user base has doubled in 3 years and is now 250 million and currently, India is the second largest Internet market globally with 450m users. A rise in these numbers has also led to an upsurge in the online/mobile gaming and e-sports sector. As users increasingly look to their smartphones as a ready source of not just communication and news, but also entertainment, the demand for this sector is steadily on the rise. This is well established by the popularity of almost all trending mobile games in India. Indeed, India has consistently ranked among the top three nations in terms of games downloaded from Google Play Store.

Further, the entry of giants like Tencent Gaming into India is sure to give a fillip to this industry. Add to it the easy availability of developers and software coders across India (and especially in IT hubs like Bangalore and Hyderabad), one can, not only see why India stands poised not only to become a huge market for the industry but also why India can lead the way in the development and invention of mobile games. To that effect, numerous start-ups and local, ‘home-grown’ developers have sprung up to explore the sector. These are the opportunities.

However, from a purely legal standpoint, such opportunities come with its host of challenges. Foremost, is the lack of savvier

And up-to-date laws which deal with the sector as distinct and different from allied or nearby sectors. In this regard, one cannot go without mentioning the betting and gambling sector. Seen often with suspicion, and heavily regulated, laws on gambling are often applied without much consideration to the online gaming sector. This is bad on multiple levels.

First, it misses the nuance that not all online games are games of chance (even where they involve an exchange of money or cash prizes etc). Second, where a game developer is able to convince authorities successfully that a game she/he/they have developed is a ‘game of skill’ only, it means that there is precious little (over and above the now inapplicable gambling laws) to regulate it. The Information Technology Act, one can argue will still apply but it only deals (and that too cursorily) with the issues of data privacy, security,and illegal content. Hence, there is no regulation or institution like Germany’s Age Rating body in India. There is also no clarity regarding the exact obligations of a game service provider to ensure that certain classes of players are unable to participate.

To give two simple examples, first, there is no clarity on how exactly game studios are to prevent children under 18 years of age from taking part in prohibited/X rated game tournaments. Is it enough to have terms of service that clearly makes you ‘check’ a box confirming your age? Or should websites and apps require Aadhar/Passport verification? Second, there is also no clarity on prohibited classes under laws like FEMA or. Hence, does it mean that a simple self-confirmation by a user that she/he/they are not based out of Pakistan suffices or would service providers be required to track and block IP addresses?

The above, however, is just the tip of the iceberg. The other issue plaguing the legal framework regulating this sector is just plainly, the age of the laws trying to cover it. The Public Gambling Act (the only central legislation even vaguely related to the sector) is an 1867 legislation! And while rules have been framed under it from time to time and the courts have tried their best to weigh in, the act did not remotely consider the invention and proliferation of internet services.

It arguably does not even apply to online gaming and its definitions of ‘common gaming house’ are ill-suited to the modernday online gaming service provider. This means, both, that depending upon the vagaries of authorities and the relative lobbying abilities of gaming service providers, either legitimate gaming services can be plagued with unnecessary legal hassles…or that obviously illegal services and games will pass legal muster simply because of these outdated laws. Practically, it means that bigger players with more capital and deeper pockets will grow while our indigenous developers and start-ups will be left to face the brunt of badly applied regulations. This will stifle innovation and should be dealt with as a priority. In this regard, the Law Commission of India did release its report on gambling (and its regulation), but the same has enough fodder to be interpreted both in favour and against the legalization of gambling. In any case, it does not deal with online gaming as a separate and distinct sector anyway.

Lastly, ‘betting and gambling’ is a state subject, and while in a (somewhat) federal system that is not a bad thing per se, no one really knows if online gaming falls within the central or state jurisdiction. Arguably, it is part of the Residuary List under the Constitution of India and should be a central subject. Irrespective, the many different laws across states creates much confusion for an online based sector where location specificity is exactly what is hard to find (i.e. the entire point of anything online is its ability to transcend narrow boundaries of state and nation). Telangana has looked to outlaw all forms of online betting (including those which have an element of luck at all, i.e. almost every game/sport ever) while Sikkim and Goa are moving towards legalizing and regulating the sector. At the very least, the various Governments involved should provide consolidated information that is easy-toaccess and understand for the average developer.

In conclusion,therefore, the quagmire of laws that exist in the sector is a huge challenge but provided it can be navigated, India could finally unleash the immense potential it holds in this fast-growing sector.