Analysis: E-Sports and Gambling

Reading time: 6-7 minutes.

E- sports or electronic sports is viewed as a standout amongst other emerging fields. This community has grown significantly in the last decade. Electronic sports can be defined as video games played on PCs. In today’s world, e- sports tournaments played by professional are witnessed by audiences from around the globe.

A potential point of debate remains, naming it as an ‘actual’ sport. While some call attention to that its rising fame is a pertinent support, others are of the view that this field would never qualify as a ‘true sport’. But the popular support is tilted in favor of latter. And the popular support for the game is evident from the fact that electronic sports has marked its presence in the Asian Games of 2018 and is a potential contender in Olympics.

The popularity of e-sports is accompanied with a sky rocketing financial value. Over the years the popularity of the game has faced some serious glitches with its unique legal implications. The legal anomaly ranges from contracts, intellectual property, endorsements, wagering, mergers, acquisitions to employment.

To solve these, it is imperative to garner support for a separate branch of law completely dedicated for its study. Urgent steps towards its achievement are ineluctable. Being a novel field, it is faced with rapidly changing issues, which makes the task of resolution even more difficult. 

E- sports in India

E- sports has gained much significance globally in the last decade. This growth can be accredited to the foundation of the Korean eSports Association in 2000, and the worldwide industry is expected to reach $1.5 billion by 2020. The prime drivers of this exponential growth are the youth of the world.

This growth has followed a similar pattern in the Indian context as well. “In a recent study by KPMG India and Google dated May 2017, it suggests that the Indian online gaming industry is set to become a USD 1 billion industry by 2021.” In spite of the fact that it has two million intermittent watchers and two million aficionados, this normal is lower than the world average.

It is perceived that India, with its enormous populace has massive potential in both income streams and ability showcase. Inferable from this view, a few organizations have already invested in the Indian e-sports industry and others have shown their manifest interests to do the same in the next couple of years.

Online Gambling

The legislations pertaining to regulation of gambling and betting in India were made before the birth of internet. Specific legislations relating to online gambling have been made by only two states, Sikkim and Assam. Card games like Rummy, Bridge and Poker have been the most common forms of gambling in India, although now with the advent of technology, this may be replaced by games played via the digital medium in the near future.

Gambling, basically means an act of wagering for money’s worth. Wagering on horse racing, lotteries and games of “mere skill” are precluded from its ambit. In K R Lakshmanan vs State of Tamil Nadu, it was held that wagering on horse racing was a game of skill as the bet is placed taking into consideration various factors which are to be objectively assessed. This reasoning has successfully been extended to justify sports betting by many.

Under gambling legislations most offences are in relation to common gaming houses. There are three essential components of a common gaming house-

1) a physical space

2) “instruments of gaming”

3) profit obtained by using them.

“Instruments of gaming” implies, ‘any article used or intended to be used as a subject or means of gaming, any document used or intended to be used as a register or record or evidence of any gaming, the proceeds of any gaming, and any winnings or prizes in money or otherwise distributed or intended to be distributed in respect to any gaming.’

There is a big debate between two schools of thought regarding the inclusion of computer terminals in the ambit of “instruments of gaming” or not. On examination of this term the physically encased spaces explicitly utilized for picking up benefit are the ones proposed to be denied. Expanding this relationship, private houses utilized without the expectation to infer benefit ought not comprise ‘common gaming house’, while a cyber cafe utilized for this reason should.

Role of global governing bodies: International E-sports Federation (IESF) and World E-Sports Association (WESA)

For any games to be recognized in their dynamic steps, they request an International Federation to be the impetus for the development. Consequently, after the refinement set down in the middle of traditional games and e-sports, the reason of having no such league as an impetus has just been unambiguous.

Due to this, the utilitarian cover among development and governance of e-sports has driven the complexities of administration to a more noteworthy degree. It is important to make reference to the fact that so far there has not been any attempt to establish a world body for regulating e-sports.

One significant among them is International E-Sport Federation (IESF). This federation predominantly aims at constantly improving e-Sports and promoting it in the terms of its values which, inter alia, includes humanitarian, educational, cultural, a unity of purpose and ability to promote peace.

The E-sports business and its unmistakable highlights have driven IESF to conceptualize on the structure of information authenticity. Notwithstanding that it likewise centers around different parts of this area, for example, national enrolment, separation of teams according to sexual orientation, consistency in the use of guidelines.

There is another association named World E-sports Association (WESA) which was established in 2016. WESA generally indulges in professionalizing the business and directing issues with respect to incomes and schedules.

This organization is likewise achieved with its own interior intervention court that works autonomously and has dependably been available to everybody engaged with E-Sports, for example, players, teams, coordinators and distributers.

Gambling and betting Laws in India

The Constitution of India in its Seventh Schedule, List II (State List) empowers the State Governments to make laws regarding gambling and betting activities. Before independence there was no such distinction and the Public Gambling Act, 1867, governed gambling and betting activities in the country.

.The Public Gambling Act, 1867, a central government legislation enacted during the pre-independence era, prohibits any games of chance and probability except lotteries. The Act prohibits owning, keeping and being found in a common gaming house, however, the Act excludes “games of skill” from its ambit.

In general, gambling laws in India have specifically prohibited people from managing or conducting business of a common gaming house. Though, ‘games of skill’ have been excluded from this blanket prohibition, complications arise when giving meaning to this term.

They owe their genesis to the ambiguity attached to this phrase. There is no fixed rule for discerning a ‘game of skill’ from a ‘game of chance’, and hence it hinges on the subjective interpretation of the courts. There remains an abiding debate on the ascertainment of these terms and their legal implications.

However, some States in India, like Odisha, Telangana and Assam have prohibited both of them. In contradistinction to these state laws, some states have permitted under specific license conduct of specific gambling activities in specific places. These are

  • Goa and Daman & Diu under the Goa, Daman & Diu Public Gambling Act, 1976 and certain notifications issued under the Goa and Daman & Diu state governments (“GDD Gambling Laws”);
  • Nagaland under the Nagaland Prohibition of Gambling and Promotion and Regulation of Online Games of Skills Act, 2015 and Nagaland Prohibition of Gambling and Promotion and Regulation of Online Games of Skills Act, 2016 (together, “Nagaland Gambling Laws”);
  • Sikkim under Sikkim Online Gaming (Regulation) Act, 2008 and Sikkim Online Gaming (Regulation) Rules, 2009 (together, “Sikkim Gaming Laws”) and
  • West Bengal under the West Bengal Gambling & Prize Competition Act, 1957 (“WB Gambling Law”).’[ii]

Lotteries are governed by Lotteries Regulation Act,1988 and other enactments by the state and central legislatures. Prize competitions in India are regulated by Prize competition rules, which aim at superintending skill-based games like crossword. Both of these follow unlike patterns in different states.

Conclusion

To a certain extent the administration of E-sports industry is the worry, we generally imagine the business to be one of the forthcoming potential greatest gaming center points of the world. With that being said, it is likewise that all accounts of most extreme significance to achieve a E-sports administration framework which would be demonstrated in consistence with all the current standards of the Sports Code and IOA prerequisites.

There has always been an unending disparity in the fabrication and the consequent implementation of gambling laws, more specifically, online gambling laws throughout the country. This primarily is due to the inclusion of gambling in the state list. Accordingly, this predicament can be solved by its inclusion in the concurrent list, which would be beneficial for the country as a whole.

E-Sports Federation of India has been bestowed with the onus of governing E-sports in our country but despite being the governing body it has not been entitled to be a National Sports Federation (NSF). India through this body should make solemn efforts toward reconciliation of International e-Sports Federation and World e-Sports Association into a global governance body of e-sports, taking into consideration the expeditious development in this novel arena.


-This article is brought to you in collaboration with Satvik Mishra and Tarannum Vashisht from Rajiv Gandhi National University of Law, Patiala.

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