Online Poker: Too many cooks spoiling the regulatory broth?

The online poker industry had boundless perspectives to deal with, leading to a hung legislative framework (read: open-to-interpretation). By Mrinal Gujare

Alegal quandary is not an easy one to get out of. Ask anyone from the real money gaming industry and they will reveal it all to you. Petitions seeking ban on online poker, citing reasons sometimes goes beyond one’s comprehension. The logjam between online poker operators and various state governments could just as easily remind you of a soap opera, which hits a high note when a court jumps in with a ruling.

The stand-off between the online poker industry and the legal framework of the country has been a hot topic of discussion for many years now. But the screenplay of this regulatory drama is full of suspense to even make a guess.

Pre-independence Era Law

The Public Gambling Act, 1867 is still being considered as relevant. There is a burning desire to have an upgraded law in place, which could stabilise the lopsided regulation. Sudhir Kamath, CEO & co-founder, 9stacks while addressing this issue said, “Not just for the online poker industry, but more broadly for the online skill-based gaming industry, of which poker is a small subset. The old law never contemplated online gaming, and today that is the dominant medium for people to entertain themselves.” While some state governments have made attempts to define and regulate the industry, there is a clear need for a central law that will lay down the dos and don’ts. This would also provide muchneeded clarity to other ancillary service providers like banks, payment gateways, and marketing channels.”

State Governments Form Independent Legislation

One can’t move ahead in this discussion without getting a word from the online poker operators. We spoke to Spartan Poker’s legal head, Rachna Shroff and got to know her view on various state governments making their own legislation for online poker. Shroff said, “It is a welcome move to

have legislation making its way towards online poker and being given a distinctive platform and recognition. While looking at the different state laws, it would be a brilliant move to have one centralized law. It saves time and effort for the law agencies and gives clarity to the entire industry across the country by bringing everyone on the same wavelength.” Another leading online poker brand Calling Station also shared its views on the logjam between operators and state governments. Calling Station’s Marketing Operations Manager, Deepika Patil stated, “Our Indian society needs to be more open-minded about poker. Unless the game is widely accepted as a game of skill, people will think

Sudhir Kamath, CEO & Co-Founder, 9stacks Rachna Shroff, Legal Head, Spartan Poker

Deepika Patil, Marketing Operations Manager, Calling Station

of it as some kind of iGaming. One day, the rising popularity of online poker will compel the government to recognise it officially.”

Business Expansion

The ambiguity in the legal structure of the skill gaming industry has been the talk of the town for quite sometime. Shroff says,” She says, “The fact that India is seen as a market which could outnumber its growth in the coming two years is magnificent. We could generate massive employment opportunities, revenue, boost innovation and flow of foreign investments. It’s unfortunate that the current laws do not provide any clear demarcation in terms of cyberspace operations and are losing out on being relevant.

Information Technology (IT) based startups and businesses have been able to expand to the point of raising funds via the IPO route, as the Government of India has called for much-needed funding schemes and policies for the startups to become big conglomerates. The existing laws need immediate attention and a complete makeover to keep up with the current time. Patil from Calling Station said, “Online poker operators had no choice but to stop offering services in states where online poker was banned. Every business sector was affected. Some businesses witnessed higher demand for their products and services, while others were impacted negatively due to the extraordinary circumstances. I am sure business operators in the industry believe that there are so many advantages that online gaming could bring in only if the government recognises the benefits.

Madras High Court Ruling

On 3rd August, 2021 the Madras High Court (HC) struck down Tamil Nadu state government’s ban on online gaming (poker and rummy) and called it invalid.

Rahul Machaiah, an LLM graduate, voted for the popular opinion on the subject when he said, “Madras HC’s recent ruling is significant. It declares online poker as a game of skill as opposed to iGaming. By ruling that citizens have a fundamental right to exploit their talent and skills to earn money through games with stakes, the court has deprecated the view that earning money by playing online poker is immoral and illegitimate. The court held that excessive paternalism amounts to authoritarianism and this has the potential to shape public opinion on the trend of banning online games.” denying this basic right means violation of the constitution. Adding more power to the perception war is Machaiah who adds that, “States ought to realize that games of skill can only be subjected to reasonable restrictions and not a blanket ban. The definitions in the legislation ought to declare poker as a game of skill. This will remove ambiguity around the nature of poker and prevent courts from differing in interpretation. It is equally important to educate the police about the legal status of poker so

that they do not prosecute people who play and organise online poker.”

We know the heavy-duty perspectives of legal experts and operator opinions must have compelled you to scratch your heads. But don’t worry, the online poker industry is taking every challenge head on. Players and brands are only hoping for the best to come soon. A headline grabbing regulatory framework could boost the fortunes of this industry and permanently bid adieu to the pesky courtroom drama.

General Perception Of Poker

The Indian constitution gives every citizen a right to practice a career/ profession of his/her choice and

Rahul Machaiah, LLM graduate