online gaming: The central government is preparing to bring major changes in online gaming sectors. Under this, there is a plan to bring online gaming companies of the country under single regulatory structure. This will eliminate different laws applicable in different states. The Ministry of Home Affairs has constituted a committee to discuss the issue, which includes officials, legal and policy experts and representatives of the gaming industry.
The committee initially considered whether a new law is required to distinguish between gaming (skills games) and gambling (risk games). The issue has been controversial for a long time, although the Supreme Court has already called online gaming a ‘skill game’ and gambling a ‘probability game’.
Taxation and illegal online betting increased anxiety
The government wants to implement the integrated structure for two important reasons. First, there is a need for clarity on the taxation of online gaming companies as these companies have challenged the GST notice of Rs 1.12 lakh crore in the Supreme Court. The court has stayed these notices and the hearing will start from 18 March. Second, the Ministry of Home Affairs is concerned about the activities of foreign companies that are offering online gaming and betting and can be used for money treatment.
The government is considering the possibility of rapid development
The government seems to have the possibility of rapid development in these areas. According to an official, the online gaming industry has made several attempts to draw foreign investment. The central government considers a law necessary for this. This law will also help India’s Financial Intelligence Unit (FIU) to control foreign companies. This step is an extension of the previous efforts launched in 2022, when the IT Ministry was made the Nodal Ministry for these areas.
Over the years, many states have enacted different laws regarding online gaming. In 2021, an attempt was made to ban online gaming in Karnataka, but it failed. The Karnataka government is planning to regulate it in 2023. Maharashtra and Tamil Nadu have also imposed some control over online gaming, but these cases have been challenged in the Supreme Court.
Foreign investment declined by more than 90%
Experts believe that state level regulations create confusion in the gaming sector, as gamers often compete with players from different states. Implementation of the same law can restore the trust of foreign investors. Due to regulatory uncertainty, foreign investment in these areas has declined by more than 90% in the last two years.
According to gaming law expert Jai Sita, the integrated law would be a matter of relief for the gaming industry. He said that if the industry is suppressed by strict rules, it could come under the control of illegal online gamble operators. Therefore, the government should apply this regulatory process with clarity.
