The NGO asserted in its petition that the government's enactment of these rules has resulted in ‘regulatory confusion’
The NGO also opposed SRBs, which are funded by online gaming companies with a vested self-interest in regulating the sector
Online gaming finds itself in an ambiguous regulatory situation as the debate around games of chance and skill remains highly controversial
A Noida-based NGO has filed a Public Interest Litigation (PIL) in the Delhi High Court recently, challenging the constitutional and legislative validity of the Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Amendment Rules, 2023, regarding online gaming, according to an ET report quoting the PIL.
Citing exclusive powers given to states for legislating on gambling and betting under the Constitution, the said NGO – whose name was not mentioned in the report – argued that the Centre has overstepped its legislative competence.
The NGO asserted that the government’s enactment of these rules has resulted in ‘regulatory confusion’ and the existence of conflicting laws governing online gaming, leaving industry stakeholders uncertain about which set of regulations to follow.
The organisation also expressed concerns about the establishment of Self Regulatory Bodies (SRBs) by the government. In its petition filed on July 1, the NGO contended that the rules transfer regulatory powers from the State to SRBs, which are funded by online gaming companies with a vested self-interest in regulating the sector.
The NGO deemed this arrangement as “wholly irrational, arbitrary, and violative of Article 14 of the Constitution,” adding that the government cannot abdicate its responsibility of overseeing and monitoring the online gaming industry by delegating it to private entities.
The Noida-based non-governmental further argued that the Rules aim to establish a framework for regulating online gaming, including online real money games, by categorising them as ‘intermediaries’ under the IT Act, 2000.
These rules impose various due diligence requirements, such as KYC verification, the appointment of grievance redressal and nodal officers, registration and membership with SRBs and entrusting SRBs with the certification of certain categories of online real money games as permissible.
According to the NGO, the exercise of power by the Ministry of Electronics & Information Technology (MeitY) in enacting and notifying these Rules is contrary to the public interest and places an unnecessary financial burden on the public while falling short of effectively addressing the issue of online gambling.
The petition from the NGO comes as online gaming is stuck in an ambiguous regulatory situation. Though the government has tried bringing some legitimacy by introducing taxation, the debate around games of chance and skill remains highly controversial.
State governments have their own interpretation of games of chance and skill, which has resulted in the likes of Tamil Nadu banning online games, a move which is being contested by companies.
