26 Jul 2015

Local publications fail to understand significance of Nagaland Online Skill Games Bill, raise concerns based on misconceptions

Some regional publications including a recent opinion piece in Nagaland Post titled ‘Online gaming: skills and chance’, indicate that the time may not be ripe for the passage of the Online Skill Games Bill (the Nagaland legislative assembly is scheduled to vote on the Bill tomorrow as per local media reports). However, the Nagaland Post article (and some other media reports) have based their conclusion on a few flawed assumptions:

  1. Painting poker and roulette with the same brush:

The article states that, “The debate over only gaming and gambling continues primarily, since games of skill such as poker or roulette have been described as ‘game of chance’(gambling) while in other places, it is labelled as game of skill…It remains to be seen if the Online Games of Skill is an innocuous bill that hides the agenda of offering online games such as poker, roulette etc. The fact is that such cash for skill games could turn out to be another way of operating gaming casinos online.”

However, the games of poker and roulette are as different as chalk and cheese. Roulette is purely and clearly a game of chance and no sane person has ever claimed anything to the contrary. Poker on the other hand is a game that stimulates the intellect and has practical applications in the field of game theory, economics, statistics and business negotiations. Eminent economists, businessmen and chess grandmasters have hailed poker as a game that requires considerable mental intellect, knowledge, experience and skill. In fact the prestigious Massachusetts Institute of Technology (MIT) has recently introduced a free online course on improving poker skills as theory and analysis of the game can be applied to investment management and training.

Although no court in India has directly and conclusively held poker to be a game of skill, International precedents and statistical evidence will make a compelling case before the courts and it is likely that courts will accept the proposition that poker is a game involving a substantial degree of skill.

  1. There is no difference between playing games of skill online or offline:

The article goes on to state that, “In view of various court interpretations in various states, it was observed that only Games of skill and that too played in physical form have been held by the courts to be valid and falling within the ambit of various enactments, dealing with Gaming, in India. However, as far as, on-line Gaming is concerned, the courts are of the view that on-line Gaming could not be compared to real game being played and would, therefore, not be allowed until ‘skill’ test is passed by it…”

In my opinion however, this is a factually inaccurate statement. No court in India has stated that online gaming cannot be compared to real games played physically. The Delhi District Court in its non-binding opinion seems to suggest such a theory as a passing observation, without going into the merits of the issue. However the Delhi Court’s opinions have no legal significance and have been challenged in the High Court.

For playing games of skill, the medium, venue or amounts wagered is irrelevant as such games have been exempted from the ambit of gambling. Whether a particular skill game is played online, in a club or at a private house does not really matter. For instance, it would be inconceivable for any court to accept a proposition that the game of chess is a game of skill if played offline but becomes a game of chance if it is played on the internet.

It is also difficult to imagine that any skill game like chess would become gambling if a person decides to pay a fee to enter a contest with a hope of winning a prize based on his superior acumen and intelligence.

  1. Problem of addiction and manipulation:

The article goes on to add that allowing licensed games of skill would increase the problem of addiction and manipulation (presumably of the software). This again is a popular misconception. There are ample opportunities for people to waste their money even in unregulated or underground markets. Bringing a regulatory regime will ensure that there are checks and balances on gaming companies and certain restrictions on allowing people to place their money. For example there may be restrictions on allowing minors to place bets on the websites or ban on persons below the Income Tax bracket who do not possess a valid PAN card from playing with real money, which would reduce chances of addiction and misuse.

Further, regulatory conditions such as the requirement of certification of the gaming software and oversight by an independent regulatory body would ensure that cheating and manipulation does not occur.

The initiative by the Nagaland government could be a first step to herald regulation of skill games in India. The usually neglected state of Nagaland has a historic opportunity to pass a legislation which could be used by other Indian states as a role model.

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