Last Modified: Fri, Apr 15 2016. 07 25 PM IST

The licences will be provided to companies incorporated in India, so it actually extends to all states within Indian borders

New Delhi: In a potential boost for online gaming in India, Nagaland governor P.B. Acharya has given his assent to a bill which aims to regulate and legitimize online games of skill. The Nagaland Prohibition of Gambling and Promotion and Regulation of Online Games of Skill Bill, 2015 will now become an Act.

Acharya gave his assent to the bill earlier this month, said K. Issac, officer on special duty at the governor’s office.

The development was first reported by gaming laws website GLaws .

The Act has a long list of online games which will now be allowed. Any game which focuses more on the skill of the players rather than chance will be legal.

The list includes chess, Sudoku, poker, rummy, virtual sports like cricket, football and fantasy sports league games.

Jay Sayta, who founded GLaws and has done extensive work on gaming laws, said the bill “brought some amount of certainty” on online games of skill. He called the law “a first of its kind, which will regularise the process to a certain extent”.

The law will allow online gaming websites to apply for licences for earning revenue out of such games. The licences will be provided to companies incorporated in India, so it actually extends to all states within Indian borders. In case any other state finds a licence holder to be in violation of its local laws, the state can inform the licensing authority in Nagaland and seek redress.

The law also penalises games of chance or gambling, and prohibits them. A fine of Rs.20 lakh can be imposed on a licence holder engaged in hosting games of chance.

Vaibhav Gaggar, managing partner at law firm Gaggar and Associates, said the law was the first attempt to make online gaming (where skill is involved) above board.

“Before this, there was no licensing regime in India,” he said. Gaggar and his firm were brought on board by the Nagaland government as experts to assist in drafting the law.

On the scope of the law, Gaggar added that the law will enable companies anywhere in India to apply for licences so long as the games they seek to offer are allowed in their own states.

“As of now, except Odisha and Assam, states say that a game of skill is not gambling and is a genuine business venture. Under the federal structure, the Constitution provides that there will be free trade and business between states. So, this law will give licences to those ventures which qualify as genuine businesses dealing in online games,” Gaggar added.

Sayta, however, questioned the pan-India nature of the bill, since states can only make laws for themselves. “There is also the issue of taxation, whether turnovers of only Nagaland-based companies will be taxed or businesses all over can be taxed. The constitutionality of the provision which bars any company which has any past or present interest in gambling in India or abroad is also questionable,” he added.

First Published: Fri, Apr 15 2016. 07 25 PM IST

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