Noida-based NGO files PIL challenging government’s online gaming rules

It went on to state that the Rules are beyond the legislative competence of the Union Government as the Constitution gives exclusive powers to states to legislate on ‘gambling and betting’. It said the Central Government’s enactment of rules has led to ‘regulatory confusion’ and dual set of laws relating to online gaming and said that presently there is no clarity on whether central or state laws should be followed with respect to online gaming. Further, it raised concerns over the government’s move to establish Self Regulatory Bodies (SRBs).

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“The Rules outsource regulatory powers of the State to SRBs, which would be financed by online gaming companies with a vested self-interest in the regulation of the community, is wholly irrational, arbitrary and violative of Article 14 of the Constitution. The Government cannot abdicate its role of overseeing and monitoring of the online gaming sector and outsource its responsibility to private bodies,” the NGO stated in its petition which was filed on July 1 and has been reviewed by ET.

The NGO claimed that the Rules seek to create a framework for regulating online gaming, including online real money games by classifying them as ‘intermediaries’ under the IT Act, 2000 and imposing several due diligence requirements and compliances. These include measures like Know Your Customer (KYC) verification, appointment of grievance redressal and nodal officers, taking registration and membership of SRBs, and also tasks these SRBs with certifying certain categories of online real money games as permissible online games.

“There should not only be effective control and regulation of online games and gambling or betting activities but there should also be an effective mechanism for such regulatory measure. The Rules neither conform to the constitutional provisions nor are effective to control online gaming activities which are growing in an untrammeled manner at an explosive pace, especially after lockdowns and the Covid-19 pandemic,” it said.

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The NGO claimed that the exercise of power by the Ministry of Electronics & Information Technology (MeitY) to enact and notify the Rules is against public interest and a drain on the public exchequer while also failing to effectively tackle the menace of online gambling.