Laws Regulating Esports in India

Laws Regulating Esports in India: All you need to Know

/ Legal Articles / By

This article on ‘Laws Regulating E-sports in India‘ was written by Risha Sharma an intern at Legal Upanishad.

Introduction

This article discusses the regulatory framework concerning esports in India.

With the rising popularity and heavy indulgence in online gaming by players and viewers alike across the globe fuelled by the lockdown-led online era, it becomes imperative to take note of and set out appropriate guidelines and regulations to place to govern and prevent malpractices in the esports arena. Owing to the lack of formal governance and legislation of esports in India, much of the practices and management remain a grey area and are evidently in need of urgent attention. Even with the States rolling out individual Acts and Bills in a bid to manage and regulate the field of online gaming and esports, several shortfalls still exist in the system.

This article analyses the legal framework regulating the e-sports industry in India.

The rise of online gaming and esports in India

The pandemic-induced lockdown brought esports to the forefront all across the globe as people sought different modes of entertainment and communication. In particular, 2021 proved to provide the much-needed push in esports in India. Due to the limitations imposed by the lockdown, a variety of events, including screening of esports tournaments and casual gameplay, were strictly restricted to online platforms.

Resultantly, a sharp rise was observed in terms of online viewing of the same. Given the large young population and comparatively easier access to the internet and online games, the growth in the online gaming industry comes as no surprise in India. The Indian gaming industry witnessed an impressive investment of $544 Million from August 2020- January 2021.[1]

Taking into account the large player base and the rising popularity of online gaming and esports, it is imperative to have set rules and guidelines in place for the same. However, the regulatory framework in India has been dismal, with little to no laws governing the online gaming and esports industry. The Ministry of Youth and Affairs has recognised the advent of esports while taking note of its distinction from segments such as iGaming and gambling.[2]

Esports can be referred to as “organised online gaming competitions” set in a competitive gaming environment wherein players with the necessary skills, whether individually or in teams play against each other.[3] As a matter of fact, esports was a full-out medal event in the Asian Games, 2022 conducted in Hangzhou, China.[4] Fantasy games can be said to refer to “online games in which players form virtual teams and compete for points.”[5]

Governing acts and bodies

Though largely ungoverned, there are a few pieces of legislation and bodies in place which look over the realm of esports. The Esports Federation of India (“ESFI”) is one such body, set out to be the apex body concerning esports in the country. But this body fails to garner due recognition by the Ministry of Youth Affairs and Sports.[6]

Additionally, only one Act comes close to regulating esports in India: The Prize Competitions Act, 1955.[7] In 2020 itself, the NITI Aayog brought in the Guiding Principles for the uniform regulation of the “fantasy games” and their platforms at the national level.[8] Such a move indicated a more conscious effort made to regulate esports, however, little development took place for the same.

State Legislation

Several State Legislations have been enacted and proposed for the regulation of esports such as The Sikkim Online Gaming (Regulation) Act, 2008 (“Sikkim Act”), the Nagaland Prohibition of Gambling and Promotion and Regulation of Online Games of Skill Act, 2015 (“Nagaland Act”), and the draft Rajasthan Virtual Online Sports (Regulation) Bill 2022 (“Rajasthan Draft Bill”). While the Sikkim Act and Nagaland Act have set out specific guidelines and defined terms such as “online gaming” and “game of skills”, yet interesting, no Act defines “esports” as a term, leaving a lot of ambiguity in place. The Rajasthan Draft Bill has drawn flake, having been largely criticized owing to its heavy leaning towards fantasy games, with complete disregard for pay-to-play online games.[9]

Self-Regulatory Bodies

In addition to the ESIF and EPWA, there are certain bodies such as the All-India Gaming Federation (“AGIF”) which is the apex industry body pertaining to the regulation of gaming companies involving online skill games. Founded on the principles of “transparency, integrity and responsible gaming”, the federation’s “Charter” ensures compliance by members and stakeholders.[10] Additionally, the not-for-profit organization, the E-Gaming Federation (“EGF”), The Online Rummy Federation (“TORF”) and the Federation of Indian Fantasy Sports (“FIFS”) too have stemmed as self-regulating bodies which help make the gaming experience more secure and transparent.[11]

Online-Gaming Bills

In terms of online gaming, attempts have been made in the past to deal with issues of betting and fraud. In 2018, Dr. Shashi Tharoor was responsible for the introduction of The Sports (Online Gaming and Prevention of Fraud) Bill, 2018, in Lok Sabha, with the objective to “establish an effective regime to maintain the integrity of sports in India by preventing and penalising sports fraud, regulation of online sports gaming and for matters connected therewith or incidental thereto,” however the Bill never saw the light of the day as the session of Parliament dissolved.[12]

Along similar lines, the Online Gaming (Regulation) Bill, 2022 was introduced in the Lok Sabha in April 2022 with an aim of “preserving integrity in online gaming and introducing a regulatory regime for online gaming.” [13] However, the Bill largely overlooks the distinction between “casual gaming” and “real money gaming”, which is a major drawback, making the Bill unstable in its current state.[14]

Laws Regulating Esports in India
Laws Regulating Esports in India

Judicial decisions on gaming-related aspects

In the landmark judgment of K.R. Lakshmanan v. State of T.N., the Apex Court set out a line of distinction between the “game of skills” and the “game of chances”.[15] The Punjab and Haryana HC have further placed reliance on the distinction laid down by the Apex Court for the classification of organized online gaming tournaments. fantasy sports and such as “games of skills.”[16] The Bombay High Court has on a similar note highlighted the stark difference between fantasy games and gambling activities.[17] On appeal, the SC in the Gurdeep Singh Case held that Dream 11 was a “game of skill” and could not be deemed as “gambling”.[18]

Suggestions

It becomes pertinent to formulate uniform legislation which will govern the entire sphere of online gaming, esports, and the like while setting out the restrictions on the same, with set distinctions between the kinds of gaming as well as clearly defined terms such as “esports”, “online gaming”, “fantasy games”, etc. It is also significant to take note of developing and existing esports laws from nations like France and South Korea to build upon such legislation as a point of reference. Further, formal recognition of esports bodies like the ESFI and Esports Player Welfare Association (EPWA) would aid in regulating the same.

Conclusion

The esports industry continues to grow at a steady pace but the industry is quite evidently plagued by several setbacks due to a lack of regulatory authority and laws. Given the largely young population, the industry is set out to grow even further in the coming years, however, the lack of adequate laws in place will certainly do more harm than good. Since the industry is still in its nascent stage and is shown to be a great source of revenue for the nation, it would be beneficial for the country to have a regulatory body govern esports while precariously maintaining the balance between the player’s rights and the harsh imposition of rules.

References

[15] (1996) 2 SCC 226.

[16] Varun Gumber v. UT of Chandigarh, 2017 SCC OnLine P&H 5372.

[17] Gurdeep Singh Sachar v. Union of India, (2019) 75 GST 258

[18] Ibid at 5

Join Our Community

Enter your email address to register to our newsletter subscription delivered on regular basis!
Please enable JavaScript in your browser to complete this form.