Blanket Ban vs Meaningful Regulation on Online Gaming

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Don’t Shoot Sparrows with a Cannon or the Principle of Proportionality

A popular Russian saying goes that one shouldn’t shoot sparrows with a cannon, implying that the use of too drastic measures for a job can ruin it for all purposes. A famous quote conveying the same message by the prominent UK magistrate Lord Diplock was used by lawyers Sh Chatterji, P Nagaraj, and Sh Vermato to illustrate their point in a recently published opinion article on the legality issues relating to online gaming.

In the publication, the trio of law specialists join their arguments relating to the principle of proportionality in the ongoing debate over whether a blanket ban or a meaningful regulation is the best way to approach gaming online.

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“You must not use a steam hammer to crack a nut, if a nutcracker would do,” said the late British Justice and Law Lord Baron Diplock and his aphorism “captures the essence of the proportionality principle, which requires all State action to be commensurate with the objectives it intends to achieve,” write the three co-authors.

The Proportionality Principle and Online Gaming Addictions

The principle of proportionality seeks a balance between conflicting interests and requires government measures that limit fundamental rights to be needed for the aimed purpose and there to exist no alternative of less restrictive measures that can achieve the same goal.

In the case of online gaming, the interest of society is to achieve protection against addictions and problem gambling, while the constitutional right of citizens to carry on any occupation, trade or business may be infringed by the imposing of measures against online gaming.

What Happens When the Principle of Proportionality is Broken

The three lawyers argue that in order to satisfy the principle of proportionality, legislative measures seeking to eliminate the problem of gaming addictions must not be excessive and the solution that can do the job with the least intrusion of constitutional rights should be selected.

The authors discuss in detail the examples of several states, such as Tamil Nadu, that amended their laws to implement bans on wagering and betting on all online games, including those based on skill.  The prohibitions were going against the established for decades Supreme and high court practice and were recently struck down by the respective high courts as unproportional and contradictory to the constitution. The blanket bans brought online skill gaming under the purview of gambling and outlawed it, thus infringing the fundamental right to conduct business activities.

Similarly, the Karnataka Police (Amendment) Act of 2021 is being challenged at the state’s high court and the authors expect this bill too to be struck down because of the unjustified embargo it imposes on online games of skill  if played for stakes.

Regulation and Licensing are Vastly Better Suited to Fight Addictions

As opposed to unproportional bans that don’t survive long and leave the public exposed to risk, a meaningful regulation and a licensing mechanism on real money online casino, gaming and fantasy sports platforms can achieve much more towards the elimination of the problem with gambling addictions and bring additional benefits to the country and the people such as enhanced taxation revenues, write the three lawyers.

A number of developed economies, including the likes of Sweden, the UK and France, have chosen to regulate online gambling through a national licensing regime that ensures them a greater control over the sector. Current trends in the field show a shift of focus from data protection to gambler protection through various responsible gaming mechanisms.

Such licenses place a number of requirements for operators that in effect protect consumers from problem gaming and addictions, excessive losses, and malpracticing platforms. Operators are bound to implement various measures such as the placing of responsible gaming buttons and links to organizations that provide support to problem gamblers on their platforms, as well as gaming time and deposit limits, restrictions on advertising and VIP offers and many more. This is no different than the regulations set in place for state lotteries. Each vendor has to follow a set of rules and these could be applied for an online lottery purchase as well for example.

Veteran Politician Sushil Modi Urged for National Regulation in Parliament

The arguments presented by lawyers Chatterji, Nagaraj, and Vermato are in line with those put forward by senior BJP leader and MP Sushil Kumar Modi in a December session of the Rajya Sabha. MP Modi too highlighted the failed attempts of several states to bring gambling addictions in check by imposing bans on online gaming and urged the central government to implement national regulation over the sector. Modi’s words were backed up by the chairman of the house Muppavarapu Venkaiah Naidu who addressed the Minister of Communications, Electronics & Information Technology Ashwini Vaishnaw and asked him to “Consult the Law Ministry and do the needful. It’s a big menace.”