Online Gambling In India And Legal Issues

Gambling in India is age old and as a general rule it isprohibited in India. The Constitution of India has demarcated the legislation makingpowers between the centre and states. The power to make rules and laws regardinggaming and gambling has been conferred upon the states. As a result different stateshave passed different laws upon gaming and gambling in their respective states. Somestates have absolutely prohibited gambling in their jurisdiction whereas some haveallowed the same to be done within their jurisdictions.

While gaming and gambling entrepreneurs are still struggling to understand and applythe laws of gaming and gambling of various states, information and communicationtechnology (ICT) has added another complicated dimension to this entire scenario.Now gaming and gambling is being conducted in an online environment with the help ofsoftware, hardware and other ICT systems. As a result Indian government is findingit very difficult to deal with online gambling in India.

There are no specific and dedicated online gaming and gambling laws in India. Thishas not deterred various individuals and companies from exploring the online gamingindustry of India. This has also resulted in increased numbers of arrests andprosecutions of various individuals and companies in India. For instance, recentlythe owner of an online betting website for IPL 7 was arrested in Mumbai for allowingbetting on his website. Similar arrests have been made by police of Delhi,Ahmedabad, Mumbai, etc. The Central Bureau of Investigation (CBI) has alsoestablished a Sports Integrity Unit to investigate illegal sports betting in India.

Meanwhile some stakeholders and entrepreneurs approached the Supreme Court of Indiato get clarity on the legality of online games like rummy, poker, etc. Supreme Courtasked the opinion of Central Government in this regard but the same has beeninformally denied by the Central Government.  This means that till the time SupremeCourt actually says that online rummy, online poker and online card games are legalin India, majority of these gaming stakeholders may be exposing themselves to legalrisks and civil and criminal liabilities.

There is also a very thin line between skills oriented gaming and gambling. We atPerry4Law believe that this is a “subjective test” that is based upon theperceptions of individual or company analysing the same. For one an online game maybe skills based game hence allowed whereas for another it may be an act of gamblinghence punishable. Perry4Law strongly recommends that till the time Indian SupremeCourt or Central Government clarifies the legal position regarding online gamblingin India, the online gaming/gambling stakeholders must comply with existing andapplicable techno legal requirements of Indian laws.

This entry was posted in Uncategorized on October 6, 2014 by PTLB.

Central Government Denies To Give Opinion Upon The Legality Of Online Games LikeRummy, Poker, Card Games, Etc

Indian Supreme Court is presently hearing a matter that candecide whether playing online rummy, poker and card games is legal or illegal inIndia. Further, Supreme Court has already clarified that the stay upon the MadrasHigh Court’s judgment would benefit only the parties to the litigation. This meansthat till the time Supreme Court actually says that online rummy, online poker andonline card games are legal in India, majority of these gaming stakeholders may beexposing themselves to legal risks and civil and criminal liabilities.

Realising the complex legal issues involved in the litigation, the Supreme Court ofIndia referred the matter to Central Government for its opinion. However, CentralGovernment has not provided any formal reply so far and a formal reply is expectedfrom Central Government on12th November 2014, the next data of hearing of this case.The Centre has asked the Supreme Court to adjudicate the matter at its own levelciting different judicial decisions and constitutional issues.

Online gambling laws of India are complicated in nature  as gambling is a Statesubject and different State have enacted different laws regarding gamblingactivities in India. We have a central law on gambling called the Public GamblingAct of 1867. Similarly, we have many state laws on gambling that are mostly basedupon the central law. Further, almost all the state laws are regulating real worldor offline gambling in India. The exception in this regard can be found in the lawsapplicable in places like Goa and Sikkim. In Sikkim, a provisional And RegularLicence can be obtained under the Sikkim Online Gaming (Regulation) Act, 2008.

To bring uniformity among various laws regarding gambling in India, the present LawCommission of India is analysing whether the Public Gambling Act of 1867 should berepealed or not. Meanwhile, those engaging in online betting and gambling are atrisks of being arrested and prosecuted. Recently the owner of an online bettingwebsite for IPL 7 was arrested in Mumbai for allowing betting on his website.Similar arrests have been made by police of Delhi, Ahmedabad, Mumbai, etc. Theincome tax official also raided four offshore casino vessels and one onshore casinoin Panaji. The Central Bureau of Investigation (CBI) has also established a SportsIntegrity Unit to investigate illegal sports betting in India. The legality of useof Bitcoins for gaming and gambling in India is also doubtful and full of legalrisks.

There are certain rules to decide whether online gambling and betting is legal inIndia or not. There are totally different set of rules for running an online pokerwebsite in India. In many cases police in India has arrested people indulging inillegal online betting. In short, legality of online gambling and online gaming is

still a grey area that requires extensive legal research and compliances beforelaunching the website in this regard. The Supreme Court of India has to decide thesecomplicated issues in the present litigation.  If the SC holds online rummy, onlinepoker and card games for stakes as gambling, the states could prosecute thoseengaged in such activities within their jurisdictions. However, if the Supreme Courtdecides in favour of such online games with stakes, then the Central Governmentwould be required to bring uniform legislation for India. That would be a tough taskfor the Central Government as the proposed legislation must be techno legal innature to be effective and contemporary. This is the reason why the centralgovernment is not willing to take any action in this regard.

World over countries are finding it difficult to regulate online gaming, betting andgambling activities due to conflict of laws in cyberspace. Online gambling andgaming laws and regulations in India and conflict principles would be very difficultto resolve in these circumstances. Other issues that require techno legallegislation skills on the part of Central Government are blocking of illegalgambling websites in India, taxation issues, online gaming regulations, mobilegaming regulations, payment gateways issues, mobile payment issues, mobileapplications legal issues, etc.

Those planning to engage in online games including online rummy, online poker, etcmust comply with techno legal requirements prescribed by various existing laws ofIndia. Otherwise, they would find themselves on the wrong side of Indian laws.

This entry was posted in Uncategorized on September 27, 2014 by PTLB.

Supreme Court Of India Asks Central Government To Clarify Its Stand RegardingLegality Of Online Rummy And Card Games With Stakes

Online gaming and gambling laws in India are in a state of flux.As the stakes are high and online gamings being a lucrative market in India, manystakeholders have taken up the matter before the Supreme Court of India to get aclear legal position. The decision of Indian Supreme Court may establish legality orillegality of online games like rummy, poker, etc.

However, we at Perry4Law believe that online rummy and online poker may still beillegal and punishable despite this judgement of Supreme Court. This is becauseIndian Supreme Court is not dealing with the legality of online rummy and onlinepoker in strict and absolute sense. As a result the legal position in this fieldwould remain a grey area. In fact, a decision by Supreme Court without anylegislative support may be counterproductive.

The real trouble seems to be use of cash or stakes while conducting online rummy andpoker competitions without following all the applicable laws of India. This issue ispartially covered before the Supreme Court that also between the parties to thislitigation alone. Both third parties and the parties to the litigation are in alegally risky position.

Supreme Court is very well aware of this situation and it has taken a stand that wasvery much required. The Court has asked the Central Government for its legal standregarding games like online rummy, online poker, etc. The Court issues a notice tothe Centre asking it to spell out its position on the legality or otherwise of theonline game of rummy and card games involving stakes. The court also extended itsstay on Madras High Court judgment that had held these games illegal as theseinvolved gambling. However, the stay is applicable only to the petitioners beforethe Court. This means other are vulnerable to legal risks and they cannot take theprotection of this stay.

The next hearing of the matter has been fixed for September 25, 2014. However, thereare no hints that the matter would be settled very soon. It may take few more monthsor years before the matter is finally settled. We at Perry4Law strongly recommendthat online gaming entrepreneurs must ensure techno legal compliance in order tostay on the right side of the law till legal position is made clear in this regard.

This entry was posted in Uncategorized on September 17, 2014 by PTLB.

The Gambling (Licensing And Advertising) Act 2014 Of UK Faces Legal Challenge FromGBGA

Online gaming and gambling industry of United Kingdom (UK) isfast changing. Regulations governing online gaming and gambling are also redraftedby UK to bring additional control over foreign online gaming and gambling serviceproviders who are targeting UK territory and its citizens.  Internet serviceproviders (ISPs) in UK were also asked to insert warning pages for gambling sitesthat are unlicensed in the UK. However, they refused to comply with this request ofUK government.

Meanwhile, the UK Gaming (Licensing and Advertising) Bill has become an applicablelaw. Following agreement by both Houses on the text of the Bill it received RoyalAssent on 14 May 2014. The Gambling (Licensing and Advertising) Act 2014 of UK (PDF)has made some significant changes in the way oversees online gaming and gamblingservice providers have to operate in UK or target UK players.

The Bill is now an Act of Parliament and an applicable law in UK. The Act requiresany operator wishing to transact with or advertise to British consumers to obtain anoperating licence from the Gambling Commission and is expected to come into force on01 October 2014. The Act has also introduced 15 percent point of consumption taxapplied to gaming operators.

However, the Gibraltar Betting and Gaming Association (GBGA) has filed a legalchallenge against the UK Gambling Commission’s decision of its new licensing systemand a 15 percent point of consumption tax for gaming operators. The GBGA believesthis regime was designed purely for economic reasons. GBGA Chief Executive PeterHowitt explained in a statement released on Monday, “The only beneficiaries of thischange are the UK domestic industry and the Gambling Commission itself, which haspersuaded the UK government that it should be the global regulator of this high techand complex industry.” The GBGA also claims that this regime impedes the right tofree movement of services as outlined by Article 56 of the Treaty of the Functioningof the European Union.

Back in India, Indian Supreme Court is hearing about the legality of playing Rummy.While this would be a crucial decision yet it must be kept in mind that despiteSupreme Court’s decision, online rummy and online poker may still be punishable inIndia. The position as on date is that online rummy and online poker are stilllegally risky in India.

At Perry4Law we believe that Indian players involved in online gaming and gamblingactivities and targeting UK and Indian markets must comply with both Indian and UKlaws. This is really tricky if they intend to explore other foreign markets as wellas conflict of laws in cyberspace are really difficult to manage.

This entry was posted in Uncategorized on September 5, 2014 by PTLB.

Online Rummy And Online Poker May Still Be Punishable In India Despite SupremeCourt’s Decision

Online Gaming is a multi crore industry in India. Despite this fact,we have no dedicated Online Gaming and Online Gambling Laws in India. This has madethe Legal Position regarding Online Games like Rummy, Poker, etc really confusingand murky. Due to diverse legal actions and situations, the matter has reachedbefore the Supreme Court of India. However, there are great misunderstandings andmisconceptions regarding the nature of present legal proceedings before the IndianSupreme Court.

For instance, the core issue before the Supreme Court pertains to Legality ofplaying Rummy with Cash Stakes. Supreme Court in this case is not concerned withOnline Rummy and it is definitely not concerned with Online Poker. However, OnlineGaming Entrepreneurs are very hopeful with the decision of the Supreme Court thatmay be pronounced in late 2014 or in the year 2015.

Rummy has already been pronounced to be a “Game of Skill” by Indian Supreme Court onnumerous counts and there is nothing new about this “Settled Legal Position” in thepresent litigation. What is new is the declaration to be made by Supreme Courtwhether Rummy can be played with Cash Stakes and whether Online Rummy is Legal or

Illegal in India?” Presently the Indian Supreme Court is considering the Cash Stakesaspect and there are no hints that Legality of Online Rummy would also beadjudicated upon by the Court. Further, parallel analogy and interpretation vis-à-vis Online Poker is not only misplaced but is also not in question before theSupreme Court of India.

The major “Legal Fallacy” in the Online Gaming business activities in India is thatentrepreneurs are applying the offline world’s standards and rules to the onlineenvironment. This is the reason that Supreme Court of India may not adjudicate uponthe online part of gaming activities in India. And applying the offline version ofthe gaming activities to online games, including upon Online Poker and Online Rummy,by Gaming Entrepreneurs of India is “Not a Legally Sound Strategy”.

Even if the Supreme Court reiterates that Rummy is a “Game of Skill” and declarethat Cash Stakes are allowed, this decision would not make Playing, Displaying andHosting of Online Rummy in India “Automatically Legal”. Online Rummy and OnlinePoker would still remain Illegal unless certain Techno Legal Compliances arefollowed by the Gaming Entrepreneurs of India. In short, Online Rummy and OnlinePoker may still be an Offence and Punishable in India unless proper Cyber Law DueDiligence (PDF) and Techno Legal Compliances are followed by Gaming Entrepreneurs.

This entry was posted in Uncategorized on September 3, 2014 by Praveen Dalal.

Indian Supreme Court Decision Could Establish Legality Or Illegality Of Online RummyAnd Online Poker In India

Online gaming is a very lucrative industry in India and it isbooming at a rapid rate. Lots of entrepreneurs are exploring Indian market in thisregard and they have come up with many innovative ideas and games. While this is agood sign for Indian economy and business community yet it is also important forIndian government to suitably regulate the business affairs of these gaming portals.

As more and mobile devices are being used for day to day transactions, mobile gamingmarket segment has also been targeted by these gaming entrepreneurs. This has givenrise to many unique legal challenges before these gaming portals. As on date we haveno dedicated online gaming and gambling law in India and application of old laws tothis new segment is creating many problems.

States like Sikkim grants provisional and regular licence under the Sikkim OnlineGaming (Regulation) Act, 2008. On the other hand, some Indian States expresslyprohibit any form of online gaming and gambling in their jurisdictions. Now it hasbeen mandated that foreign companies and e-commerce portals would be required toregister in India and comply with Indian laws. This would require many techno legal

compliances on the part of these companies especially following of the cyber law duediligence (PDF) and e-commerce due diligence in India.

Taxation issues like service tax, sales tax, etc have also started surfacing inIndia. Indian government is devising many new methods to make e-commerce and onlinegaming and gambling websites taxable for their business transactions. In fact, mostof the e-commerce websites of India are already on the regulatory scanner ofEnforcement Directorate (ED) for possible foreign exchange and foreign directinvestment (FDI) violations.

Online rummy and online poker have attracted the attention of many gamingentrepreneurs in India. However, regulatory uncertainty has forced them not toexplore these areas fully. It is still not clear whether it is legal to play onlinepoker in India or not. Similar is the case with online rummy and none can clearlysay that online rummy is legal in India to play till the matter is settled by eitherthe Parliament or the Supreme Court of India. In fact, ancillary laws applicable toonline poker and online rummy are flouted by almost all the poker and rummy websitesoperating in India whether they are Indian or foreign.

The Supreme Court of India is presently hearing a matter that would have a bearingon the interpretation of legality or illegality of online poker and online rummy inIndia. However, till the matter is conclusively decided by the Indian Supreme Court,it would be a sound business practice to comply with all the applicable laws ofIndia while running various online poker and online rummy websites in India.Otherwise, civil and criminal prosecutions may occur and that would be a majorsetback for the gaming entrepreneurs of India.

This entry was posted in Uncategorized on September 2, 2014 by PTLB.

Owner Of Online Betting Websites For IPL 7 Arrested In Mumbai

Online gaming and gambling related prosecutions havesignificantly increased in India. Recently, the police of Delhi, Ahmedabad, Mumbai,etc have made arrests relating to illegal online bettings in India. The sportsintegrity unit of Central Bureau of Investigation (CBI) would also curb illegalsports betting in India. The Andhra Pradesh CID has requested Cert-In to blockPlaywin’s online lotteries website in AP. The income tax official also raided fouroffshore casino vessels and one onshore casino in Panaji. If we analyse thesenegative developments, it is clear that online betting in India is more on the sideof contravention of laws than their compliances.

The latest to add to this list is the arrest of Jitendra Tanna alias Jitu Dhadi(50), the owner of the two websites www.vbet24.com and www.khelmasti.com and whostarted the private accounts for bookies and punters to accept bets on the IPL-7. Hewas arrested by the city crime branch from Kandivli on late Tuesday evening. He hasbeen booked under various IPC sections of gambling, cheating, forgery, breach of

trust and Information technology (IT) act and will be produce in the court onWednesday. Police said that Jitu is a key accused in the betting racket.

”We will now interrogate him to know who and how many bookies/punters have accountsin his circle and whether he was fixed only betting or beyond that. We also want tointerrogate him to know the flow of money through the illegal hawala operators”,said Nandkumar Gopale, senior inspector of property cell.

Police said that they are also likely to call the professionals who helped themtailor make this website and the software for the bookies. This is natural as wellas website developers and software makers are also required to ensure cyber law duediligence (PDF) in India. Even mobile application developers are liable forviolation of Indian laws through their applications.

The mobile gaming and online gaming related regulations in India are also not dulycomplied with by various stakeholders. The online gaming market in India is boomingbut regulatory compliances cannot be ignored.

This entry was posted in Uncategorized on June 4, 2014 by PTLB.

Mobile Gaming Market In India And Legal Challenges

Entertainment and media industry of India is all set to touch newheights in India. Information and communication technology (ICT) has also expandedthe reach and scope of entertainment and media industry in India. Along with thesegrowth trends there are also many challenges that must be taken care of by theseindustries.  These include cyber law due diligence requirements (PDF) and cybersecurity compliances as well.

Mobile and online gaming industry of India is also fast maturing and as per variousbusiness reports it is going to grow further in the coming years. However, themobile application developers in India are not complying with Indian laws as ondate. While online gaming market of India is fast growing yet when it comes to rulesand regulations various gaming stakeholders are very lax in following the same. Evenrules pertaining to mobile payment are not followed in true letter and spirit.

Many mobile gaming stakeholders in India have explored the route of e-commerce aswell without following the legal requirements. Surprisingly, the e-commerce duediligence in India is neglected by even the investors and financial institutions.

There are set online gaming industry laws in India that must be adhered to byvarious online gaming stakeholders, including the mobile gaming companies andstakeholders. Individuals and companies providing online and mobile gaming

facilities and services must not only comply with traditional laws of India but alsowith the Information Technology Act, 2000 (IT Act 2000) and many other techno legalregulations as applicable in India.

For instance, a mobile gaming provider may be held accountable for the contents andgames it provides to various consumers and users. Mobile games providers are also“Internet intermediary” within the meaning of IT Act, 2000 and they can be heldliable for violation of Internet intermediary obligations. Further, payment gatewayissues are also involved in mobile gaining services.

If a company is involved in the creation and marketing of mobile games, itsdirectors can be held liable for cyber law violations through such mobile games. Theliability of directors can be found under various Indian laws like IT Act, 2000,Companies Act, 2013, Code of Criminal Procedure, 1973, Indian Penal Code, 1860, etc.Even the legal risks for companies developing e-commerce and online and mobilegaming applications and websites in India are well known.

In their own interest, mobile games providers in India must strictly comply with thetechno legal requirements as prescribed by various Indian laws. Otherwise, they mayfind themselves on the wrong side of the Indian laws.

This entry was posted in Uncategorized on May 9, 2014 by PTLB.

Delhi Police’s Crime Branch Busts Betting Syndicate For IPL Cricket Matches

Recently the Ahmedabad crime branch arrested two bookies fortheir alleged role in betting on IPL Cricket matches. Now it has been reported thatthe Delhi Police’s crime branch has busted a betting syndicate for IPL cricketmatches.

With the arrest of a mechanical engineer and three others, the Delhi police’s crimebranch claimed to have busted a betting syndicate in the Rohini area of outer Delhi.According to the police, 40 mobile phones, one television, one mobile signalbooster, one laptop, a printer and a voice recorder have been recovered in the raid.

On a tip-off that betting will be placed on IPL cricket match between SunrisesHyderabad and Mumbai Indians on 30 April, a raid was conducted and the accused werearrested. They have been identified as Rakesh Sethi, Bantu Nagpal, Sanjay Hasija andVishu Sethi.The police said that the accused were accepting bets in person as wellas through mobile phones. They were also providing lines to several other bookies.

Three mobiles phones were being used as “dabba” to broadcast rates to the bookies.The betting amount of the match till the time of the raid was Rs 25 lakh and thegang has so far accepted betting amount to the tune of Rs 1 Crore in the ongoing IPLseason, according to the police.

During interrogation, the accused disclosed that earlier they used to put bets oncricket matches and subsequently they decided to work as bookies as well as toprovide betting lines to small bookies.

“They were earlier operating from Sonipat in Haryana but the local police gotsuspicious about their activities so they decided to shift to Rohini area to runtheir operations in rented premises so that their activities remain unnoticed in anew locality,” the cops said. Rakesh Sethi, the kingpin works as mechanical engineerin a private firm.

This entry was posted in Uncategorized on May 4, 2014 by PTLB.

Ahmedabad Crime Branch Arrested Two Bookies For Their Alleged Role In Betting On IPLCricket Matches

The betting on IPL cricket matches is not new. Online gamblingand betting in India is strictly regulated and any deviance is considered to be acrime. Despite this fact, illegal online gambling and betting is happening in Indiaa lot.

The individuals who are indulging in illegal online gambling and betting have beenoperating from all corners of India. They are using technology to conduct theirillegal operations and activities.

Now it has been reported that the city crime branch of Ahmedabad has arrested twobookies, who were wanted for their alleged role in betting on IPL cricket matches,from Bopal on Saturday. Acting on a tip-off, a team of the crime branch officialsraided a shop in a complex on the Sardar Patel Ring Road in the evening and nabbedthe two wanted bookies along with five others from the spot.

According to crime branch officials, the team lead by inspector B P Rojiya got atip-off on Vinod Mulchandani and Jitu Bopal that they were found in Bopal area. Theteam swung into action and raided a shop in Amrapali Complex on Bopal road.

A member of the team said that the police seized Rs 1.5 lakh in cash, mobile phoneworth Rs one lakh, laptop, diaries and a television set from the spot. Four carsbelonging to the accused have also been seized from the spot by the police.

“Vinod Mulchandani is considered to be one of the top bookies in the city whose namesurfaced during the last year’s IPL matches. In some of the recent cases, JituBopal’s name had surfaced through whom some major transactions were routed. Thediary seized from the spot will throw more light on the entire betting racket,” saidan official.

This entry was posted in Uncategorized on May 4, 2014 by PTLB.

Income Tax Official Raids Four Offshore Casino Vessels And One Onshore Casino InPanaji

Use of gambling platforms for illegal transactions and moneylaundering has become a cause of concern for the tax authorities of India. Recently,the Enforcement Directorate (ED) raided and searched many Bitcoin companiesoperating in India. ED believes that Bitcoins can be used for hawala transactionsand funding terror operations.

Now it has been reported that the income tax officials on Tuesday raided fouroffshore casino vessels and one onshore casino in Panaji, on a tip-off that theywere indulging in illegal cash transactions. A team of officers from Bangaloreraided the offices and vessels of Deltin Royale and Deltin Jaqk, Casino Pride 1 andPride 2, as well as Hotel Neo Majestic in Porvorim that lodges Casino Paradise. Theresidences of company directors B R Arora, Ashok Wadia and Ashok Khetrapal in Goa,Mumbai and Delhi were also raided, I-T sources said.

The casinos were shut down for the day, and customers present, when the I-Tofficials arrived, were asked to leave. “But, we have not sealed any of the casinosyet,” an I-T detective clarified.

“We received information that the casinos were being used for money-laundering. Asmany of the high-rollers do not divulge the source of the money they spend gambling,the casinos are also unable to keep an account of the same,” said an I-T sleuth. “Wehave seized a large number of documents and some cash, and are now going through theaccounts to gather evidence. It may take a few days to complete the process,” headded.

A Notification by Goa Government for Preventing Money Laundering and for CombatingFinancing of Terrorism 2012 (PDF) was issued in 2012 in this regard. By virtue ofclause xiv of that notification the Goa Anti Money Laundering and Financing ofTerrorism Guidelines 2013 (PDF) were formulated.

Through these regulations, the Goa Government had mandated that all casino operatorsfollow certain “Know Your Customer” norms, requiring them to keep a record of theidentity of every customer and the source of the person’s money. It is alsocompulsory for casino operators to report financial transactions of more than 10lakh to the financial intelligence unit of the Central Government. All customer-related data should be retained for 10 years, according to the guidelines.

With reference to the new item appearing in the Media titled “IT department raidsthe premises of the company”, Delta Corp Ltd has Clarified to BSE that the IncomeTax Authorities had carried out search and seizure proceedings at the premises of

the Company and certain officials on April 29, 2014. The Company is in the processof collating & responding to all the queries raised by the Income Tax Authoritiesand the responsible officers of the company have been extending all co-operation inthis regard.

This entry was posted in Uncategorized on May 4, 2014 by PTLB.

Sports Integrity Unit Of Central Bureau Of Investigation (CBI) Would Curb IllegalSports Betting In India

Illegal sports betting have significantly increased in India. Infact, an anti match fixing law of India has already been proposed by IndianGovernment. However, online gambling and online betting are still not considered tobe legal in India except in certain circumstances.

Meanwhile, the law enforcement agencies of India have been working hard to curb andpunish online gambling rackets and activities in India. Many sophisticated onlinegambling rackets have been busted by Indian Police in the past. Recently Mumbaicrime branch busted an online gambling network spreading across India.

Even the Central Bureau of Investigation (CBI) has set up a new “Sports IntegrityUnit” as part of an effort to combat illegal sports betting in the country.  The newunit will operate under the guidance of the Special Crime Branch in Delhi. The unitwill be tasked with investigating and enquiring into matters related to sportfrauds, combating malpractices in sports and coordination with sports federationsand law enforcement agencies.

The Sports Integrity Unit will also actively engage with the Indian Ministry ofYouth Affairs and Sports in order to ensure that the law dealing with corruption insports is put in place as soon as possible. The CBI said that by setting up the newunit, India will become one of the few nations in the world to have a dedicated setup as part of its federal investigative agency that focuses on sporting frauds.

This entry was posted in Uncategorized on May 4, 2014 by PTLB.

Tamil Nadu Police Files Application In The Supreme Court Claiming That Sampath KumarFalsely Deposed Before Mudgal Committee

The Tamil Nadu Government has recently moved the Supreme Courtof India and rubbished the allegations by police officer Sampath Kumar relating tothe IPL probe on betting and spot fixing. The application has described theallegations as false and baseless and said that he was suspended on charges ofextortion and demanding bribe from bookies.

In its application seeking to implead itself in the ongoing BCCI case, it said Mr.Sampath Kumar had made scathing allegations against the Tamil Nadu Police withoutimpleading the State of Tamil Nadu. It said the Intervener had not cited eitherCBCID or Tamil Nadu Government as respondent to misguide the Supreme Court. It saidthe attempt of the intervener was only to quash/stay the suspension order datedFebruary 27 without following the procedure of first approaching the CentralAdministrative Tribunal.

A Bench of Justices A.K. Patnaik and Ibrahim Kalifulla had already reserved orderson the plea of Cricket Association of Bihar for a further probe by an independentpanel, preferably by Justice Mudgal panel itself.

In his application Mr. Sampath Kumar had prayed for a SIT probe into the involvementof the top BCCI management and some cricket players in the betting and spot fixingscam in the IPL-6 matches. He said he was part of the investigation conductedearlier by the CBCID, Chennai and later shunted from the probe and suspended. Healleged that the Chennai Police had indulged in a cover up operation and had notconducted the probe in a free and fair manner.

The Tamil Nadu Police has filed an application in the Supreme Court saying thatsuspended IPS officer Sampath Kumar had falsely deposed before the Justice MukulMudgal committee that investigated the Indian Premier League spot-fixing and bettingscandal. Kumar, who was part of Tamil Nadu Police’s ‘Q’ Branch, had opened a can ofworms by alleging that bookies were involved with prominent players, includingcurrent Team India stars. Kumar’s deposition is part of a report submitted by theMudgal panel to the Supreme Court on February 10.

For the first time, Tamil Nadu Police has clarified that it suspended Kumar inFebruary this year for extracting a bribe from cricket bookies who operated inChennai. The application says that Mahendra Singh Ranka (a bookie) gave Rs 30 lakhto Kumar “in his office” and delivered Rs 30 lakh to three persons as directed bythe IPS officer. Kumar has appealed against his suspension in Supreme Court.

The Tamil Nadu Police application says: “In order to escape from the clutches oflaw, Kumar had falsely deposed before the probe committee headed by Justice Mudgal.”It adds: “Various allegations made by Kumar against CBCID are absolutely false,factually incorrect and baseless.”

The application also rejects Kumar’s claim that he was transferred from ‘Q’ branchto Tiruchy at the behest of influential persons wanting to derail investigations.Tamil Nadu Police says Kumar’s transfer was “according to government rules andprocedures.”

Tamil Nadu police says Kumar should not have deposed before the Mudgal committee.“He was not a member of the investigating team,” said the application, adding thesuspended IPS officer should have impleaded the CBCID, Tamil Nadu as a party in hispetition to the apex court.

The Supreme Court is on the verge of forming a second committee to probe the IPLcase further. The court wants Justice Mudgal to lead the probe again, but the Boardof Control for Cricket in India is for a new man to head the second round ofinvestigations. It remains to be seen how the court deals with the Tamil Nadu Policeapplication as Kumar’s deposition can prove to be critical in the entire case.

This entry was posted in Uncategorized on May 4, 2014 by PTLB.

Online Gaming Industry And Laws In India

The fine line and distinction between online gambling and onlinegaming in India is not appreciated and understood by online gambling and gamingenthusiastics of India. As a result they are frequently prosecuted in India forviolating online gaming and online gambling laws of India. Even technical mechanismsare also used to curb such activities in restricted territories or zones. Forinstance, the Andhra Pradesh CID has requested the Cert-In to block Playwin/swebsite in AP on the ground of prohibition of online gambling in AP. In the past,Kerala refused permission to Future Gaming Solutions India Private Ltd to sellNagaland lotteries in the state.

We have very specific and unique online poker laws and regulations in India. Whetherby design or ignorance, online poker websites in India are violating these laws ofIndia. Many online poker players in India also play the same in active violation ofthe laws of India in this regard. Most of them are not even aware whether playingonline poker in India is legal or illegal. Further, taxability of online pokerwebsites of India is another crucial issue that is frequently ignored by pokerentrepreneurs. The laws and regulations for online gambling and online gaming inIndia must be religiously followed by all the stakeholders in their own interest.

Both online gaming and online gambling market of India is fast booming and maturing.Entrepreneurs in these fields have started exploring Indian markets to establishtheir ventures in India. Some of them have even established their businesses inneighbour countries like Nepal and Sri Lanka so that the moment Indian market isliberalised they can easily establish their venture in India. Amazon is also

targeting home entertainment segment as it bought Videogame Studio Double HelixGames.

Mobile games have also become popular world over, including India. The market sizefor online games and mobile games is tremendous. There are very few players as ondate in the mobile gaming industry of India. However, these players have to resolvemany techno legal issues before they can establish their businesses in India. Theseinclude mobile payment compliances, payment gateway and POS terminal service duediligence, websites development compliances, Internet intermediary obligations,cyber law due diligence (PDF), etc. Presently many mobile application developers areviolating Indian laws and may be prosecuted in the near future.

Perry4Law strongly recommends that online and mobile gaming entrepreneurs andbusinesses in India must ensure techno legal compliances before launching theirrespective ventures in India. Avoiding these techno legal compliances would provecounter productive in the long run.

This entry was posted in Uncategorized on March 9, 2014 by PTLB.

Andhra Pradesh CID Requests Cert-In To Block Playwin’s Online Lotteries Website InAP

Online gambling and gaming is a very lucrative field and it isattracting the attention and interest of both national and international players.However, we have no dedicated online gambling laws in India and the legaljurisprudence in this regard is still evolving. Both the Indian government and lawenforcement agencies of India are trying to tackle technology related crimes andoffences in India but without much success.

Recently, the Tamil website Savukku was ordered to be blocked by Madras High Court.However, immediately after the order, the website was openly available by usingproxy URLs. As per media reports, the Crime Investigation Department (CID) of theAndhra Pradesh police had sought a ban on the website of “Playwin” which hasallegedly been selling online lotteries banned in the state.

While many believe that it would be an easy ride for Playwin in this regard yet thisis not as simple as it is appearing. As the matter involved information technologyand the website has an online presence, the issues of internet intermediaryliability and cyber law due diligence (PDF) would also arise. These issues would notbe easy to be countered by Playwin. Recently the 99Acres.com and olx.com/olx.infound themselves in a fix for possible violation of cyber law due diligence andInternet intermediary liability of India. Playwin cannot take this issue lightly inthe near future.

Almost all of the online poker websites in India are violating one or other laws ofIndia. Although online gaming market in India is booming yet regulatory compliancescannot be ignored. It seems online gaming and online gambling industry of India isnot considering regulations while conducting their businesses in India.

In the present case, CID Additional Director General of Police T Krishna Prasad saidthat Sikkim government and its marketing agent (Essel Group Lottery Company)organise online lotteries in the lottery free zone states including Andhra Pradeshand the Essel Group Lottery Company sells online lotteries through their website.Accordingly, a letter has been addressed to the Director, Indian Computer EmergencyResponse Team (CERT-In) at New Delhi, with a request to block the operations of thewebsite in Andhra Pradesh, which is a lottery free state, the CID chief said in thestatement. The public has been cautioned not to get involved in such lotteries sinceit is a banned activity in Andhra Pradesh, he said.

The provisional and regular licence under the Sikkim Online Gaming (Regulation) Act,2008 can be granted but they are not enforceable around the India. These licenceshave their own territorial and other legal limitations. The state of Andhra Pradeshis agitating one such transgression upon its territorial and legal rights. Let ussee what legal explanations would be provided by Playwin to escape from the blockingthreat.

This entry was posted in Uncategorized on March 8, 2014 by PTLB.

Online Poker Laws In India Are Flouted By Poker Websites

Perry4Law is frequently asked questions like is it legal to playonline poker in India? We are also frequently approached regarding the legality ofopening an online poker website in India. There is no straight forward answer tothis complex question. The truth is that opening of an online poker website andplaying online poker in India may be both legal and illegal depending upon the factsand circumstances of each case.

There are no dedicated online poker laws and regulations in India. However, onlinepoker activities are governed by multiple laws of India and all of them need to beduly complied with to run a legal online poker activity. Most of the online pokerwebsites in India are violating Indian laws and may be prosecuted as well in thenear future. This is partly due to lack of awareness and partially due toindifference of Indian government to bring suitable policy reforms in this field.

The laws and regulations for online gambling and online gaming in India arescattered under different statutes. Similarly, the laws pertaining to online pokerare also scattered under different legislations.

We believe that opening of a legally sustainable and legal online poker website inIndia is a continuous process. One cannot simply start a website and offer online

poker games in India. The ultimate test of legality of an online poker website inIndia is whether it is complying with different applicable laws of India. This,unfortunately, is not happening presently and like Bitcoins the online pokerwebsites may found themselves on the wrong side of law very soon.

This entry was posted in Uncategorized on March 1, 2014 by PTLB.

Laws And Regulations For Online Gambling And Online Gaming In India

Many of the Perry4Law’s clients had asked whether online gamblingis legal in India or not? There is also a general confusion regarding online gamingand online gambling regulatory requirements in India. Online gambling laws in Indiaare totally different from online gaming laws of India. Further, online betting lawsin India are also differently applicable to different situations. India is alsocontemplating formulating anti match fixing laws to prevent illegal online bettingand match fixing in various games.

Similarly, lottery laws in India are different and they apply differently indifferent states of India. One state may refuse to allow sale of lotteries of adifferent state in its jurisdiction. Recently, Kerala refused permission to FutureGaming Solutions India Private Ltd to sell Nagaland lotteries in the state. Thestate of Sikkim grants provisional and regular licence under the Sikkim OnlineGaming (Regulation) Act, 2008.

Since online gambling essentially involves use of information and communicationtechnology (ICT), conflict if laws are bound to arise. An online gambling or onlinepoker website may be legal in one country but it may be illegal in another countrylike India. Any entrepreneur who wishes to explore multiple markets around the worldmust keep in mind the conflict of laws aspect of online gaming industry.

The online poker laws in India have also evoked much interest from both national andinternational stakeholders and entrepreneurs. Few of them have even considered usingBitcoins for online gambling and online gaming purposes. However, it is of utmostimportance that an online poker website in India must be legally opened and managedin a lawful manner from time to time. There are very specific legal requirementsregarding opening a legal online poker website in India.

The online gaming market of India is fast booming but regulatory compliances arestill to be adhered to. For instance, compliances in the field of encryption, cloudcomputing, cyber law due diligence (PDF), Internet intermediary obligations, paymentgateways, mobile applications development, online gaming websites development, etcare still not taken care of by various online gaming and online gambling websitesand entrepreneurs. Recently, the Mumbai Crime Branch busted an online gamblingnetwork spreading across India.

Ignoring the techno legal requirements for establishing online gambling and onlinegaming business and website in India could prove fatal in the long run. Perry4Lawstrongly recommends that online gaming and online gambling entrepreneurs must dulycomply with techno legal compliances before launching their project and website.

This entry was posted in Uncategorized on March 1, 2014 by PTLB.

Delaware And Nevada Signs Pact To Allow Both States To Play Online Poker AgainstEach Other

Online poker is passing through an interesting phase in UnitesStates (U.S.). However, it is still to be seen whether online poker would be bannedor allowed in U.S. New Jersey has reported a good beginning for online gamblingwithin the state. On the down side, Merge Gaming suspended online poker accounts inNew Jersey and Delaware for security reasons.

Now it has been reported that Delaware Gov. Jack Markell and Nevada Gov. BrianSandoval on Tuesday signed the country’s first gambling agreement that will allowpeople in both states to play online poker against each other.  The governorsdescribed the agreement as the first of its kind and said they hoped other states,like New Jersey would join.

The technology is not yet developed, so it will take some time for multistate onlinepoker to be up and running, the governors said. But the agreement signed Tuesdaygets “the legal piece” taken care of, Markell said. The agreement with Nevada,currently limited to poker, is “a natural next step to make sure our gaming industryremains on the cutting edge,” Markell said. A bigger pool of players will be moreattractive to potential players, Markell said. People would need to be physicallypresent in either state to participate, no matter where they live, the governorssaid.

The online gambling and betting laws in India are also changing.  Many stakeholdershave approached Perry4Law so that they can establish online poker and online rummywebsite by remaining on the right side of the laws.

We need dedicated online gambling laws in India that can clearly demarcate therights and obligations of various stakeholders in this regard. However, till thenthe stakeholders must keep in mind various applicable laws of India especially thecyber law due diligence requirements (PDF).

This entry was posted in Uncategorized on February 26, 2014 by PTLB.

Online Gaming Market In India Is Booming But Regulatory Compliances Cannot BeIgnored

Online gaming industry in India heading towards a big success.Amazon is also targeting home entertainment segment and in order to do so it hasbought videogame studio Double Helix Games. This shows the seriousness of technologycompanies to explore the online gaming industry of India.

However, along with the commercial challenges, techno legal regulatory complianceswould also be required to be fulfilled by various online gaming entrepreneurs inIndia. There are many legal risks for online gaming website developers and designersin India. Similarly, online poker websites in India are violating Indian laws andthey may be prosecuted in the near future. This is more so regarding the legalissues of e-commerce in India that are grossly ignored by various stakeholders inIndia.

Indian laws have prescribed stringent punishment for mobile application developers,websites developers, mobile payment service providers, etc. As per the InformationTechnology Act, 2000 the Indian and foreign online gaming companies and gamingproviders in India are Internet intermediaries and they are required to comply withcyber law due diligence requirements (PDF) as well.

Even technology companies have started taking note of these laws. Google’s onlinedefamation case is still pending before the Supreme Court of India. Similarly, Appleremoved Blockchain application from its app store due to legal concerns pertainingto Bitcoins across the world.

Cubeia has recently decided that it would support Bitcoins for its business tobusiness poker network. This would raise many techno legal issues as use of Bitcoinsand Bitcoins exchanges in India is full of legal risks. The taxation liability ofonline games in India is also maturing.

Besides techno legal issues, online gaming providers would also be required tointroduce the element of “localisation” to make their online games successful. Texttranslation, dialogue dubbing and character outfits are among the most common tweaksin the “localisation” work by firms wanting to capitalise on Asia’s booming onlinegaming market. However, the term localisation is not confined to mere commercialaspects but it covers legal issues as well. This means that local laws are alsorequired to be complied with by Indian and foreign online gaming service providers.

Thus, online gaming market in India is booming but regulatory compliances cannot beignored by online games providers. This is more so if these games providers arecontemplating seeking foreign investments in Indian ventures as cyber law duediligence for foreign investors would be the norm in India in near future.

This entry was posted in Uncategorized on February 11, 2014 by PTLB.

Amazon Targets Home Entertainment Segment By Buying Videogame Studio Double HelixGames

Entertainment and media industry is fast growing world over. Thegrowth and challenges of entertainment and media industry of India have already beenoutlined by Perry4Law in its research report. We have also outlined the legal issuesthat entertainment and media industry of India would be facing in the near future.India is also witnessing a growing interest in online gaming segment that is full oflegal risks and compliance requirements.

It has been reported by TOI that Amazon would be buying a California-based videogamestudio named Double Helix Games. The studio’s history dates back nearly two decadesand it has created titles for play on major videogame consoles as well as onpersonal computers. Some have indicated that this may be an attempt of Amazon torelease its own console for home entertainment. Amazon has not yet disclosedfinancial terms of the deal.

“Amazon has acquired Double Helix as part of our ongoing commitment to buildinnovative games for customers,” a company spokeswoman said. Speculation in gamingindustry circles for several months has suggested that Amazon is preparing its owngame console, possibly using Android operating system. Microsoft and Sony inNovember hit the market with new generation consoles, Xbox One and PlayStation 4respectively, in a battle to be at the heart of digital home entertainment in theinternet age.

For Indian e-gaming and e-sports market, companies like Amazon, Microsoft and Sonyhave to do much more than putting in place appropriate hardware and software. Thoughwe have no dedicated e-sports and e-gaming laws and regulations in India yet we haveprovisions under different laws that govern and regulate e-gaming and e-sportsrelated tournaments and activities in India.

This entry was posted in Uncategorized on February 7, 2014 by PTLB.

Tax Laws And Liability For Online Poker Websites In India

Online poker industry in India is passing through a stage oftransformation. The online poker website owners and entrepreneurs are stillconsidering the legality of playing online poker and opening online poker websites

in India. Even the liability of websites developers and managers of online pokerwebsites has been outlined in India.

Nevertheless, the online poker websites in India are heading towards legal troublesas they are not complying with Indian laws. Use of Bitcoins by online poker websitesand other stakeholders has further raised the legal bars. When even the Bitcoinexchanges of India are under regulatory scanner, individual online poker websitesexperiment with Bitcoins is really risky. Even Apple has removed Blockchainapplication from its app store to ensure compliances with laws of differentjurisdictions, including India. Apple’s plan to launch mobile payment servicethrough touch ID must also be judged on similar considerations.

As more and more foreign companies aim at exploring Indian markets, they havestarted paying attention to Indian laws. Indian courts are presently analysingwhether Google is liable to pay tax in India or not? The issues pertaining to incometax liability of websites like Google, Facebook, Twitter, etc would also arise inIndia in near future. The online poker websites and their players are also requiredto comply with Indian income tax and other tax related laws.

For the purposes of computing taxes under Indian laws, there is no differencebetween a legal and an illegal income. Thus even illegal betting and gamblingwinnings would be liable to be taxed under Indian laws. The distinction of skillsversus change is irrelevant to decide the liability if tax under Indian laws.Depending on the Double Tax Avoidance Agreement (DTAA) between India and othercountries, some activities may be exempt from double taxation. However sincegambling does not figure in the DTAA, it may be taxed in many countries.

Thus, not only the online poker websites must be legally running in India but theymust also be in strict compliance with Indian income tax laws. The Income Tax Act,1961, Foreign Exchange Management Act (FEMA) 1999, Anti Money Laundering Law,Information Technology Act, 2000, Indian Gambling Act, etc would collectively governthe legal liability of online poker websites in India.

Ignoring the internet intermediary liability and cyber law due diligence (PDF) byonline poker entrepreneurs in India can be legally fatal. There only one or twoonline poker websites in India that are complying with these legal requirements. Theonline poker websites are also required to ensure that their payment gateways areduly approved by the Reserve Bank of India (RBI). Cyber due diligence for Paypal andonline payment transferors in India must also be ensured. How many online pokerwebsites are following these regulatory requirements is still to be tested byvarious authorities of India.

This entry was posted in Uncategorized on February 7, 2014 by PTLB.

Merge Gaming Suspends Online Poker Accounts In New Jersey And Delaware For SecurityReasons

A few days before we covered a story titled will online pokerbe banned or allowed in the United States of America? The article covered thecontemporary online gaming and gambling environment prevalent in U.S. Some states inU.S. have already allowed online gaming and others may also be contemplating doingthe same. A good start for internet and online gambling in New Jersey has alreadybeen reported.

However, online gaming enthusiastics in U.S. are also facing technical and legaldifficulties. According to Poker News Report, this weekend, hundreds of online pokerplayers in New Jersey and Delaware tried to log in to play poker on their MergeGaming skin (Carbon Poker, BetUSA, Sportsbook etc.) and discovered that theiraccounts had been suspended for “security reasons”.

After several players had contacted their site’s customer support, it became clearthat the accounts were being suspended “as per restrictions set in your state” withno prior warning and with no procedures in place to facilitate the withdrawal ofplayers´ bankrolls.

This is a scary situation that has been created due to inadequate and improperonline gaming and gambling laws in various states across the U.S. For instance, ifplayers have deposited cash or its equivalent like Bitcoins at an online pokerwebsite or a platform like Merge Gaming and the site/platform suspends or deletesany account, there is no mechanism to get the refund in such a situation. It seemsthe online poker players have to read in between the lines and fine prints of termsand conditions of various websites/platforms to approach only those online pokerwebsites that are fair and legal risk free in their dealings.

It is claimed that Merge Gaming is complying with the legislation that wasintroduced to regulate online poker in New Jersey and Delaware, which explicitlyprohibits the operation of an unregulated online gambling site. Recently, ISPs inUnited Kingdom refused to display warning pages for unregulated online gamblingwebsites. However, stakeholders in U.S. seem to be more compliant in this regard.

On the other hand, the Indian online gaming industry is maturing and it is evenlegal to play online poker in India if proper laws and regulations have beencomplied with. Even Cubeia is exploring Indian online gaming market with additionalpayment options. For instance, Cubeia would support Bitcoins for its business tobusiness poker network and it may explore this possibility in India as well.

A new trend in the field of online gaming and gambling industry is to acceptBitcoins as an addition payment mechanism. However, the legality of Bitcoins isstill not clear in many jurisdictions.  Even the Bitcoin exchanges and Bitcoinswebsites operating in India must comply with Indian laws to be legal. Internationalonline gaming enthusiastics and entrepreneurs must explore Indian markets for theirlegal playing pleasures and ventures.

This entry was posted in Uncategorized on January 27, 2014 by PTLB.

ISPs In UK Refuse Insertion Of Warning Pages For Unlicensed Gambling Sites

Online gambling legal environment in the United Kingdom (U.K.) isfast changing. Recently, the U.K. Gaming (Licensing and Advertising) Bill Passed theThird Reading in the House of Commons. The Gambling (Licensing and Advertising) Billof United Kingdom 2013 (PDF) is an attempt on the part of U.K. to streamline onlineand remote gambling in UK. It is accompanied with the Pre Legislative Scrutiny OfThe Draft Gambling (Licensing And Advertising) Bill Sixth Report of Session 2012–13Volume I (PDF) and Pre Legislative Scrutiny Of The Draft Gambling (Licensing AndAdvertising) Bill Sixth Report of Session 2012–13 Volume II (PDF). UK MPs havedebated remaining stages of the Gambling (Licensing and Advertising) Bill 2013-Third Reading Dated 26 November 2013 (PDF).

In a related development, the British government’s attempts to help protect usersagainst illegal online casinos has been slowed down after Internet service providers(ISPs) in the country denied requests to insert “warning pages” on gambling sitesthat are unlicensed in the U.K. The warning pages would act to alert users to theunlicensed nature of the site they are accessing, much as warnings are enforced onsites with pornographic content which advise users of illicit images.

To give effect to their intention, the Gambling Commission that regulates commercialgambling in the U.K. met with ISPs like BT and TalkTalk hoping that the ISPs wouldagree to the so-called “splash pages”. However, the ISPs refused to cooperate andhave insisted on a court order or primary legislation to enact the move before theywill take any action.

Those close to the talks between the different bodies have stated that thegovernment’s request which was put forward to the Internet service providersillustrates that the Gambling Commission is having difficulty clamping down onunlicensed and offshore gambling websites. This is natural as well as due toconflict of laws in online gambling field.

While the Commission may have jurisdiction over commercial gambling within the UK,they have no authority over sites being operated overseas which can be accessed byUK punters, and can therefore offer little protection to residents in Britain.

The Commission’s scramble for help from the broadband suppliers comes after newlegislation which will see tax and licensing dependent on where the customer lives,rather than where the operators are located, which many licensed operators believewill go unenforced due to an inability to regulate unlicensed operators.

The stumbling blocks that the Commission is tripping over just adds further evidenceto the difficulty faced by governments when trying to regulate the Internet, as

local laws and regulations are frequently unenforceable in relation to offshorecompanies, which also realise they can often get away with noncompliance.

This entry was posted in Uncategorized on January 23, 2014 by PTLB.

Will Online Poker Be Banned Or Allowed In The United States Of America?

Many states of the United States are exploring the option ofallowing playing online poker within their jurisdictions. Some of them have alreadystarted allowing the same. For instance, a good start for Internet and onlinegambling in New Jersey has already taken place.

However, there are some aberrations as well when it comes to allowing use ofBitcoins for gaming and gambling in U.S. It has been reported that two Las Vegascasinos would start accepting virtual currency known as Bitcoins. However, this is atricky situation as use of Bitcoins is legally risky in many jurisdictions includingIndia. Even Bitcoins exchanges in India have been facing legal actions in manycases. Recently, the E-Sports Entertainment LLC (ESEA) entered into a consentjudgment for creating ESEA Botnet and violation of CFA and CROA.

For the time being, there seems to be no clarity regarding playing of online gamingan online gambling in U.S. This is more so when Bitcoins are used for such playing.The Poker News Daily has reported that though Americans are free to play onlinepoker in three states yet efforts in the direction of legalising and regulatingonline poker are also on rise.

In fact, a letter has been sent to state Attorneys General calling for an outrightban on online poker. The letter is divided into two parts. The first is a plea fromChris Koster, Missouri’s Attorney General, Jon Bruning, Nebraska’s Attorney General,and Alan Wilson, South Carolina’s, to their fellow state Attorneys General fromaround the country, urging them to sign the attached letter to the Chairmen andRanking Members of both the Senate and House of Representatives JudiciaryCommittees. The Attorneys General also want the federal government to ban onlinegambling in the three states – Delaware, Nevada, and New Jersey – that have alreadylegalised and regulated it.

That letter asks Congress to make online gambling, including poker, illegal. InDecember 2011, the U.S. Department of Justice was seized with the question whetherUse of the Internet and Out-Of-State Processors to Sell Lottery Tickets Violates theWire Act (PDF).  The Department said that the Wire Act outlawed only online sportsbetting, not all online gambling.

It seems the issue is not going to die very soon just like in India. The legality ofonline poker in India is still not clear and it is a grey area. Any entrepreneur whowishes to start an online poker business in India has to comply with Indian laws tothe best possible extent. Otherwise, he may find himself on the wrong side of thelaw.

This entry was posted in Uncategorized on January 23, 2014 by PTLB.

Good Start For Internet And Online Gambling In New Jersey

Recently the State of New Jersey allowed playing of onlinegambling within the State. The first week of online gambling in New Jersey has beenreported to be successful and casino regulators are relieved with this positivedevelopment.

It has been reported that during the week 37,277 accounts had been set up, enablingpeople to win or lose money on card games, table games and slots, all from computersor smartphones.

That, of course, was the whole point of New Jersey’s law making it the third stateto legalize Internet gambling, after Nevada and Delaware. It is designed to bringnew money to Atlantic City, whose 12 casinos have been struggling with increasingcompetition from casinos in neighboring states.

Six casinos, the Borgata Hotel Casino & Spa, the Trump Taj Mahal Casino Resort,Trump Plaza Hotel and Casino, the Tropicana Casino and Resort, Bally’s Atlantic Cityand Caesars Atlantic City, offer online gambling. The Golden Nugget Atlantic City isexpected to join them within a week.

One of the biggest problems many users experienced at the start of the test periodwas being rejected by Geolocation filtering technology designed to verify that theyare within New Jersey’s borders, a key requirement of the law. The Geolocationtechnology, which uses data including the identification of a computer’s Wi-Finetwork and the location of reception towers near a cellphone, is working as itshould, according to regulators and technology providers.

Anna Sainsbury, CEO of GeoComply, said adjustments to the technology used by most ofthe New Jersey casinos offering Internet gambling have reduced the “false negative”rate to about 10 percent. That means only one in 10 users will wrongly get an errormessage saying they are not in New Jersey, even though they are. That is 25 percentbelow the level of false negatives Nevada experienced when it launched onlinegambling earlier this year, she said.

Sainsbury said the technology is now accurate “to within a few meters”, and mostusers along the state’s borders should be able to log on and gamble. Before thelaunch, several technology providers said they deliberately set their electronicfences back an unspecified distance from the border to guard against someone in NewYork or Pennsylvania being able to gamble in New Jersey.

The biggest problem now facing would-be online gamblers is funding their accounts.Credit card companies are uneven in their approval rates of transactions intogambling accounts, with MasterCard approving nearly eight times the amount Visa was

during the first week, regulators said. Direct bank transfers were the mostsuccessful means to fund accounts in the early going, they said.

This entry was posted in Uncategorized on December 2, 2013 by PTLB.

The UK Gaming (Licensing And Advertising) Bill Passes The Third Reading In The HouseOf Commons

Online gaming and gambling is witnessing a regulatory overhaulworld over. While some countries like Singapore plans to ban online gaming and enactlaws against online gaming by remote companies yet other countries like UnitedKingdom are working in the direction of allowing such activities.

The Gambling (Licensing and Advertising) Bill of United Kingdom 2013 (PDF) is onesuch attempt on the part of UK to streamline online and remote gambling in UK. It isaccompanied with the Pre Legislative Scrutiny Of The Draft Gambling (Licensing AndAdvertising) Bill Sixth Report of Session 2012–13 Volume I (PDF) and Pre LegislativeScrutiny Of The Draft Gambling (Licensing And Advertising) Bill Sixth Report ofSession 2012–13 Volume II (PDF). UK MPs have debated remaining stages of theGambling (Licensing and Advertising) Bill 2013- Third Reading Dated 26 November 2013(PDF).

The Bill was introduced into the House of Commons on 9 May 2013. The Bill makesprovision about the licensing and advertising of gambling. Under the Gambling Act2005 of UK, it became possible, for the first time, to offer “remote gambling” fromequipment based in Great Britain. The Act defines remote gambling as gambling wherecustomers participate through the use of “remote communication” such as theInternet, telephone, television, or radio.

The Gambling (Licensing and Advertising) Bill would amend the 2005 Act so that allremote gambling operators would be required to obtain a licence from the GamblingCommission to enable them to transact with British customers and advertise inBritain.

The Bill requires all offshore online gambling operators with customers in the UK tohold licences and pay taxes. Online Casinos has reported that Helen Grant, the U.K’sCulture Minister, commented, “The Bill is a prudential measure which will providegreater protection for consumers based in Great Britain,” she said. “It will tightencurrent legislation to ensure that all remote gambling, whether provided in Britainor overseas, is a licensed activity subject to the Gambling Commission’s standardand controls.”

As the legislation proceeds to the House of Lords it is very likely the bill will bepassed and become law. The law is expected to come into effect by the spring of2014. . The Minister also said she thinks this legislation will be a benefit togambling customers in the UK due to a strict new set of guidelines and licensingrequirements for online gambling firms from offshore.

According to Poker Update an aspect of the Bill that has gained widespread coverageis the point of consumption tax that would be introduced should the Bill be enactedinto law. That tax would be put onto offshore online gaming companies who have UK-based customers who use their product within the UK’s borders.

The current point of consumption tax on Gross Gaming Revenues in the UK stands at 15percent and would be the tax imposed on companies which are affected by this bill.The tax has attracted criticism from some sections of the online gaming industry,especially from Gibraltar, which is the base of a number of gaming companies due toits low taxes and low business costs.

Such companies and industries may be adversely affected by the bill, especially ifit means paying more taxes and other costs associated with being licenced to operatein the UK. While that could end up being the case, the bill does somewhat legitimizeonline poker and gaming and shows that the UK government recognises that many of itspeople engage in it.

This entry was posted in Uncategorized on December 1, 2013 by PTLB.

Singapore Plans To Ban Online Gaming And Enact Laws Against Online Gaming By RemoteCompanies

Online gaming and gambling industry is witnessing atransformation stage these days. Traditionally various nations have adopted a zerotolerance towards online games and gambling and the laws of most of the nationsprohibit online gambling.

However, online gaming and gambling is a potential source of revenue and many smallnations are primarily depending upon the revenue generated through online gaming andgambling for their continued growth. So much are the stakes involved that Antiguasuccessfully brought an action against the United States at WTO for banning theAntigua’s online gambling activities in US.

However, online gambling is still frowned in many jurisdictions. For instance,Singapore is contemplating banning of online games by local as well as distanceonline game service providers. According to Poker Update, this declaration cameduring the Third Singapore Symposium on Casino Regulation and Crime on Thursday.This was made clear by the Second Minister for Home Affairs S Iswaran as he informedthat the Singaporean government was concerned about the potential negative effectsthey believed online gaming had on those who engaged in the activity. “The natureand design of the games, especially poker and casino-type games, lend themselves torepetitive play and addictive behaviour,” he said.

While he did not give particular examples of that occurring in Singapore, theminister did point out that online gaming had been rising in popularity in the

Southeast Asian city-state in recent years. It is believed that the online gamingmarket in Singapore was worth as much as SG$376 million (around US$299.6 million).

The increasing prevalence of online gaming in the country led Iswaran to state thatthe government has aimed to put forward laws against online gaming by remotecompanies. “As an extension of our current laws, the government intends to restrictremote gambling by making it illegal unless there are specific exemptions,” hesaid. “We will introduce new laws to give our enforcement agencies the powers to actagainst facilitators, intermediaries and providers of remote gambling services.

“We will introduce measures to block access to gambling websites, block payments toremote gambling operators, and prohibit advertisements promoting remote gambling.”It is unclear when exactly the Singaporean government will move forward with theaforementioned restrictions, laws and measures. However, the intention to introducethem is not such a major surprise.

The country’s government resisted allowing casinos and gaming areas to beestablished in Singapore until the last decade. It currently implements strict ruleson Singapore’s two casinos and Singaporean citizens who wish to frequent them. Thathistory of tight control on gaming is what makes the latest aims toward banningonline gaming unsurprising.

This entry was posted in Uncategorized on December 1, 2013 by PTLB.

Is Use And Dealing In Bitcoins Legal Or Illegal In India?

Bitcoins are gaining worldwide acceptance among the digitalcommunities and netizens. They are also becoming an acceptable mode of payment amongthe e-commerce, online gaming and online gambling industry. Many enthusiastics inIndia has started accepting Bitcoins for various purposes without realising that useof such Bitcoins in India may be illegal and punishable.

The Central Government and Reserve Bank of India (RBI) have the powers to issue banknotes and coins respectively. Thus private individuals or companies cannot issuebank notes or coins unless authorised by the Central government or RBI. However,till now neither the Central Government nor the RBI has authorised any person orinstitution to issues, use, generate, mint or mine Bitcoins in India.

RBI has not yet formulated regulations to govern trading or profits generated fromBitcoins. RBI does not consider Bitcoin legal tender and, therefore trading inBitcoin is not legal. Obviously, there cannot be regulations from RBI for an illegalactivity. People who use it, do so at their own risk and responsibility. Regulatorsare studying the impact of online payment options and virtual currencies todetermine potential risks associated with them.

Some guidance can be obtained from the Indian virtual currency schemed issued byRBI. However, Bitcoins, their functionality and legality of use in India is still agrey area. The Information Technology Act, 2000 (IT Act 2000) is the cyber law ofIndia that governs the online acts or missions in the Indian cyberspace. The IT Act2000 prescribes cyber law due diligence in India and the Internet intermediaryliability in India.

RBI believes that the unregulated link between virtual currency (if permitted), andtraditional currency with a legal tender status poses challenges as the completecontrol over the differently denominated virtual currency is given to its issuer,who governs the scheme and manages the supply of money at will.

Under some category of virtual currency schemes which provide for bidirectionalflows, it acts like any other convertible currency, with two exchange rates (buy andsell). In such schemes, the virtual currency can be used to buy not only the virtualgoods and services, but also to purchase real goods and services. Virtual currencyschemes are different from electronic money schemes as the virtual currency beingused as the unit of account has no physical counterpart with legal tender status.

A virtual currency scheme may also be designed to compete with traditionalcurrencies used for international trade. The absence of a distinct legal frameworkimplies that the traditional rules under financial sector regulation andsupervision, including the institution of central banks, are not involved in thecase of virtual currency.

RBI has also prescribed that only banks which have been permitted to provide MobileBanking Transactions by it shall be permitted to launch mobile based prepaid paymentinstruments (mobile wallets and mobile accounts).

In short, the dealing in Bitcoins in India is still a “grey area” and it is not safeto consider it “strictly legal”. Till the time Indian government or other regulatoryauthorities of India make use and dealing of Bitcoins legal in India, the use of thesame in India is at the own “legal risk” of concerned person or institution.

This entry was posted in Uncategorized on November 30, 2013 by PTLB.

Anti Match Fixing Law Of India In Pipeline: But What About Online Gambling AndBetting?

Gambling laws in India are outdated and colonial in nature. Theyhave been drafted many decades before and they need urgent rejuvenation keeping inmind the growing use of information and communication technology (ICT).

For instance, when gambling laws of India were drafted, the lawmakers of India couldnot foresee the possible advent of online gambling in India. As on date we have nodedicated online gambling laws in India. The online gaming and betting laws and

regulations in India are still in a nebulous state and in most cases it is illegalto indulge in online gaming and betting.

The recent match fixing scandal has opened the eyes of Indian government and it hasdecided to pass a law to curb such evil practices through a law. The same may beintroduced in the monsoon session of the Indian parliament.

While doing so the Indian government must not miss the chance to regulate onlinegambling and betting in India as well. Presently many websites have been offeringonline gambling facilities in clear disregard of the Indian laws. There is an urgentneed to clarify the legal position in this regard.

In fact, the law ministry has already started working on the proposed law and adedicated team has been asked to look into every detail. As the head of thesegambling rackets are located outside India, essential provisions in this regard mustbe incorporated in the proposed law.

There is also an urgent need to regulate e-commerce websites that are indulging inonline gambling. In fact, the e-commerce websites in India must be regulated byIndian government whether they belong to online gambling or other e-commerceactivities.

Only time would tell about the seriousness of the efforts of Indian government tocurb the menace of gambling and betting in India.

Source: E-Retailing Laws And Regulations In India

This entry was posted in Uncategorized on November 29, 2013 by PTLB.

Internet Gambling Laws In India

Running online businesses in India require compliance with e-commerce laws and regulations of India. There are many techno legal issues of onlinebusiness in India that must be complied with before an online store or platform isopened. The exact nature of such legal compliances depends upon the nature of onlinebusiness.

Surprisingly, the e-commerce compliances in India are really bad and Indiangovernment and various regulatory bodies have not taken any action in this regard sofar. For example, cyber law due diligence, Internet intermediary liability and cyberdue diligence for Indian companies are some of the compulsory legal issues that havebeen ignored by almost all e-commerce players of India.

According to India’s leading e-commerce law firm Perry4Law, the most vulnerablecategories that have opened their online shops pertain to online pharmacies, online

gambling and gaming, electronics, etc. These e-commerce portals are not at allcomplying with the respective laws of these segments.

Even the Indian government is lax in implementing the regulatory and compliancerequirements against these illegal online pharmacies, gambling portals and othersimilar e-commerce platforms.

In this entire mess a question that requires urgent answer is whether onlinegambling and betting is legal in India? According to Perry4Law, the golden rule fordeciding whether online gambling in India is legal or not has to be judged by manyfactors that depends upon the facts and circumstances of each case and upon state tostate. There are many states in India where gambling is legal and few where evenonline gambling and betting is legal. However, there are some states like Mumbaiwhere online gambling is expressly prohibited and made a punishable offense. So itdepends upon the state where you wish to carry the online gambling and bettingbusiness.

Then there is the rule of skills versus chance as laid down by the courts of India.As a general rule, where the game involves application of skill on the part of theplayer and the element of chance is minimal, the activity would be considered to bea game and not an act of gambling. However, the applicability of this test of skillversus chance may not be applicable to online or Internet games, betting andgambling as various judicial decisions pertaining to different sets of facts andcircumstances and can be distinguished easily in subsequent litigations.

Finally, economic and taxation legislations like tax laws of India, anti moneylaundering laws, etc are also involved while operating online casinos, onlinegambling and betting and online gamming platforms.  The provisions of these economiclegislations are very stringent in nature and can cause great detriment to the owneror operator of the online casino, gambling and betting website.

Perry4Law recommends that to be on a safer side, it is better to comply with varioustechno legal laws of India while opening an online gambling, gaming and bettingplatform rather than facing the punitive provisions of Indian laws.

Source: Techno Legal Thoughts.

This entry was posted in Uncategorized on November 29, 2013 by PTLB.

Provisional And Regular Licence Under The Sikkim Online Gaming (Regulation) Act,2008

Sikkim is the most liberal State for allowing online gaming andbetting in India. As per the Constitution of India, gambling and betting is a StateSubject and States are free to enact laws as per their own requirements.

The Sikkim Online Gaming (Regulation) Act, 2008 has provided a legal framework foronline gaming in India. This is a revolutionary piece of legislations as it hastried that no other State has been able to achieve. The 2008 Act has been notified(PDF) and it is now operational in the State of Sikkim. Even an authorised officer(PDF) has been appointed under the 2008 Act by the Sikkim Government.

In order to make the provisions of 2008 Act operational, the Sikkim Online Gaming(Regulation) Rules, 2009 (PDF) were formulated. Perry4Law and Perry4Law’s TechnoLegal Base (PTLB) have discussed these Rules 2009, along with necessary 2009amendments, for the larger interest of all stakeholders.

Under the Sikkim Online Gaming (Regulation) Act, 2008 there are provisions regardinggranting of provisional and regular licences.

A provisional licence is first issued by the Government of Sikkim if it is satisfiedthat the application made by the applicant complies with all the requirementsprescribed in this regard. A fee of Rs. 1 lakh must be given by the applicant andhe/she/it must set up the necessary infrastructure and other requirements so as tobe in a position to commence operation of online games and the sports games.

If the Government is satisfied that the applicant is fully ready to commenceoperations of online gaming and sports gaming activity and has complied with thestipulations prescribed in the said provisional licence and such other terms andconditions prescribed in the Act and Rules, the Government may grant a regularlicence for operation of online games and sports games in Form-2A for five years onpayment of a fee of five lakh rupees.

For enabling the conduct of Online Games and Sports Games specified under Rule 3 ofthe Sikkim Online Gaming (Regulation) Rules, 2009 the following terms and conditionsshall apply:

(1) The provisional licence is issued for the specific purpose of enabling theapplicant company to set up and establish the entire requisite infrastructure andother components necessary for actual commencement of online gaming and sportsgaming activity.

(2) The provisional licence does not confer any right to the licensee to commenceits online gaming and sports gaming unless and until all the requirements stipulatedby the State Government are fulfilled and the regular licence is issued by theGovernment.

(3) The Licensee shall operate Online Games and Sports Games from Sikkim only.

(4) The Licensee shall commence actual online gaming and sports gaming operations,i.e., “go live” within 120 days.

(5) The licensee should make available only the games specified under rule 3 of theSikkim Online Gaming (Regulation) Rules, 2009. If the licensee intends to includenew games, prior approval of the Government must be obtained.

(6) The Licensee shall allow any Officer authorized by the Government to inspect thesetup process or inspect premises from where the online games are to be operated.

(7) The Provisional licence is valid for 120 days from the date of issue andimmediately on the licensee intimating in writing to the Government that it is readyto commence actual online gaming and sports gaming operations, i.e., “go live” andon such determination by the State Government that the applicant licensee hascomplied with the stipulations prescribed hereinabove and such other terms andconditions prescribed in the Act and Rules, the licensee may be granted a regularlicense for a period of five years on payment of fees of five Lakhs rupees asprovided under the Rules.

(8) The Licensee shall pay to the Government a sum of one lakh rupees as ProvisionalLicense fee through a Bank Draft in favour of the Director, Sikkim State Lotteries,and submit the same before issue of the said licence.

(9) The provisional license is liable to be cancelled if the licensee violates anyof the above terms and conditions and the provisions of the Sikkim Online Gaming(Regulation) Act, 2008 and the rules made thereunder.

Source: IIPS.

This entry was posted in Uncategorized on November 29, 2013 by PTLB.

Is It Legal To Play Online Poker In India?

There are no dedicated laws and regulations for online poker inIndia as on date. Further, there are no specific judicial decisions pertaining toplaying of online poker in India. Both players of pokers and websites hosting thepoker games are in a fix to decide whether to play and host the poker game on awebsite in India. Till date the position of playing online poker in India is a greyarea.

Since the area is developing there are very few cyber law firms in India and cyberlawyers who can provide effective legal support and services in this regard. TheInformation Technology Act, 2000 is the sole cyber law of India and very few lawfirms and lawyers are practicing in this novel field. Even among those practicingthe cyber law field, there are only handful of lawyers who can take up the matterpertaining to online gaming and gambling in India.

Online gambling laws in India are different that online gaming laws of India.Further, online gambling and gaming laws and regulations in India and conflictprinciples must also be kept in mind by online poker websites of India.

According to Perry4Law, the exclusive techno legal ICT law firm of India, to startwith, any online poker website of India that wishes to engage in legal business mustcomply with Indian laws like Indian Penal Code, 1860, Code of Criminal Procedure,1973, Indian Information Technology Act, 2000, the Public Gambling Act, 1867,Foreign Exchange Management Act (FEMA) 1999, etc.

Taxation, money laundering and payment gateways issues must also be taken care of bythose proposing to open online poker websites in India. Further, various guidelinesand rules issued from time to time must also be complied with by online pokerwebsites of India opines Perry4Law.

The crux of the legal position seems to be that if an online poker website isfollowing the laws of India while operating in India, it is legal to play onlinepoker in India. However, if the laws of India are breached during such onlinepresence both the cyber law of India and other applicable state laws may beattracted.

Online gaming industry is booming in India and it is going to be a multi billiondollar industry in India.  In order to capture this market the online pokerentrepreneurs must comply with all the applicable laws of India and consult somegood techno legal firm before launching their websites.

Source: Techno Legal Thoughts.

This entry was posted in Uncategorized on November 29, 2013 by PTLB.

E-Sports Entertainment LLC (ESEA) Consent Judgment For Creating ESEA Botnet AndViolation Of CFA And CROA

E-Sports Entertainment Association (ESEA) has been facing theBitcoin fiasco for some time. Bitcoin is a secured digital currency that is in greatdemand these days. There is also a wider acceptance of Bitcoins as a digitalcurrency for various purposed and for numerous goods and services.

ESEA also decided to experiment with Bitcoins in the past. However, the experimentactually resulted in violation of the laws of United States. So what exactlyhappened that has resulted in pressing of serious criminal charges against ESEA? Thedetails of the case are available through the document titled E-Sports EntertainmentLLC (ESEA) Consent Judgment for Creating ESEA Botnet and Violation of CFA and CROA(PDF).

According to this document,  the prosecution has argued that ESEA’s conductconstitutes deceptive and unconscionable commercial practices pursuant to the NewJersey Consumer Fraud Act, N.J.S.A. 56:8-1 et seq. (“CFA”) and unauthorized accesspursuant to the New Jersey Computer Related Offenses Act, N.J.S.A. 2A:384-1 et !gq.(“CROA”).

A details analysis of this case is beyond the scope of this article and we wouldcover the same in our subsequent article. Sufficient is to say that ESEA secretlyupdated its client software with Bitcoin-mining code that tapped players’ computersto mint more than $3,600 worth of the digital currency.

Acting Attorney General John J. Hoffman, the Division of Law and the Division ofConsumer Affairs has recently announced that on-line video gaming company E-SportsEntertainment, LLC, has entered into a $1 million settlement that resolvesallegations it infected thousands of personal computers with malicious software codeenabling E-Sports to monitor what programs subscribers were running and illegallymine for Bitcoins.

The State alleges that E-Sports created and deployed malicious software code thatinfected the computers of thousands of customers who subscribed to its anti-cheatservices for popular on-line video games.

According to the complaint, the malicious code enabled E-Sports to monitor users’computers even when they were not signed onto or using E-Sports services. E-Sportsalso created a botnet – a network of computers running malicious software — usingits customers’ computers. The botnet used the computing resources of users’computers to mine for Bitcoins, a virtual form of currency. It is estimated that,during a single two-week period, E-Sports took control of approximately 14,000computers in New Jersey and across the nation, and generated approximately $3,500 bymining for Bitcoins.

As part of its settlement with the State, E-Sports has agreed to refrain fromdeploying software code that downloads to consumers’ computers without theirknowledge and authorization. The company also must submit itself to a 10-yearcompliance program and create a dedicated page on its Web site that specifies whattype of data it collects, the manner in which the data is collected, and how theinformation is used. E-Sports must pay the State $325,000 of its $1 millionsettlement obligation. The remainder is suspended and will be vacated within 10years, provided the company adheres to all settlement terms and avoids futureviolations of the law.

“Consumers who subscribed to E-Sports’ video game anti-cheat services paid forprotection from cheaters – not to be cheated by the very services they’d purchased,”said Division of Law Director Christopher S. Porrino. “Companies that collectconsumer information and access users’ computers have a duty to ensure thatprotocols and procedures are in place to protect the information they collect.Moreover, no company should obtain more access or information than is necessary toengage in the legitimate operation of its business.”

“Following our $1 million settlement with PulsePoint earlier this year, today’ssettlement serves as another victory for consumer privacy for New Jersey consumersand consumers across the country,” said Division of Consumer Affairs Director EricT. Kanefsky. “Whether through the circumvention of browser settings, unlawfullymining for Bitcoins or by failing to adequately protect customers’ personal datafrom breaches, our office will hold accountable those companies and individuals thatviolate consumers’ expectations of privacy.”

However, in an e-mail addressed to Ars Technica, Eric Thunberg, the head of ESEA,has given a statement that the company had “no further comments at this time”. Thatstatement, in part, says “We want to make it clear to our community that we do notagree with the Attorney General’s account of the Bitcoin incident. The settlementthat was signed makes explicitly clear that we do not agree, nor do we admit, to anyof the State of New Jersey’s allegations. The press release issued by the Attorney

General about our settlement represents a deep misunderstanding of the facts of thecase, the nature of our business, and the technology in question”.

We would analyse the settlement in details and would cover more issues in thisregard in our subsequent articles.

This entry was posted in Uncategorized on November 28, 2013 by PTLB.

Kerala Refused Permission To Future Gaming Solutions India Private Ltd To SellNagaland Lotteries In The State

The sale of and dealing in paper based and online lotteries inIndia is governed by the Lotteries (Regulation) Act, 1998 of India (PDF) and theaccompanied Lotteries Regulation Rules 2010 of India (PDF). The provisions of theAct and Rules must be adhered to in order to engage in, sale and purchase of realworld and online lotteries in India. If the provisions of the Act and Rules areviolated, criminal prosecution and imprisonment can also be there.

Further, as per Act and Rules one State is well within its right to deny the dealingand organisation of a lottery game/event by another organising State if the latterdo not comply with the requirements of the Act and Rules.

In one such incidence reported by New Indian Express, Future Gaming Solutions IndiaPrivate Ltd sought permission for sale of Nagaland lotteries in the State of Kerala.However, the State of Kerala refused to grant such permission citing the dubioushistory of violating Lottery Regulation Act and Rules in the sale of Sikkim Statelotteries in Kerala by Future Gaming in the past. Besides, the Government ofNagaland has not informed the Government of Kerala about its intention to sell itslottery tickets in the State.

Santiago Martin, the prime accused in lottery fraud cases, is a director of FutureGaming Solutions. The Kerala State produced a notice before the Kerala High Court onTuesday in this regard. The Kerala High Court disposed of a petition by SantiagoMartin seeking a directive to the State Government to consider the application forthe registration of promoter for the sale of Nagaland lotteries in the State.

As per the notice “It was revealed in an inquiry conducted on the sale of Sikkimlotteries that Future Gaming Solutions company had illegally printed Sikkimlotteries worth `60.65 crore in unauthorised printing presses and sold it in theState through Megha Distributors from April, 2010, to August 31, 2010,”.

“The present application for sale of Nagaland State lotteries is yet another attemptfrom the company to amass wealth illegally by cheating the public,” the notice said.It said the CBI had taken up 32 cases in connection with violation of the LotteryRegulation Act and investigation is going on.

The violation of the Act had wreaked havoc and led to public fury, which was felt inthe State Assembly also. It is pointed out that the company did not furnish detailsof persons/firms involved in the sale of Nagaland lotteries. “This is a clearviolation of the statutory directions issued by the Central Government,” the noticestated.

The agreement by the company with Nagaland Government was void. “If the agency sellslotteries based on the illegal and ambiguous agreement, it gives room for thedistributor to play fraud as is evident in the case of Sikkim and Bhutan lotteries,”the notice stated.

Source: P4LO Blog.

This entry was posted in Uncategorized on November 28, 2013 by PTLB.

Is Online Gambling And Betting Legal In India?

As a leading techno legal ICT law firm of India, Perry4Law is frequently approachedfor numerous techno legal issues. One of them pertains to e-commerce laws andregulations in India.

Recently many queries have been raised about the applicable online gambling laws andregulations in India.  We have also observed that e-commerce legal compliances inIndia are not followed in true letter and spirit. This may be due to lack ofknowledge about applicable e-commerce laws but ignorance of laws is no excuse.

If e-commerce players do not follow the laws of the land, they may found themselvesin uncomfortable situations. For instance, cyber law due diligence, Internetintermediary liability and cyber due diligence for Indian companies are some of theissues that have been ignored by almost all e-commerce players of India.

Coming back to the burning issue whether online gambling and online betting is legalin India or not? We have already covered the legality of online gambling and bettingin India and other e-commerce compliance requirements in India but we would brieflycover the same once again.

The golden rule for deciding whether online gambling in India is legal or nor has tobe judged by many factors that depends upon the facts and circumstances of each caseand upon state to state. There are many states in India where gambling is legal andfew where even online gambling and betting is legal. However, there are some stateslike Mumbai where online gambling is expressly prohibited and made a punishableoffense. So it depends upon the state where you wish to carry the online gamblingand betting business.

Then there is the rule of skills versus chance as laid down by the courts of India.As a general rule, where the game involves application of skill on the part of theplayer and the element of chance is minimal, the activity would be considered to bea game and not an act of gambling. However, the applicability of this test of skillversus chance may not be applicable to online or Internet games, betting andgambling as various judicial decisions pertaining to different sets of facts andcircumstances and can be distinguished easily in subsequent litigations.

Finally, economic and taxation legislations like tax laws of India, anti moneylaundering laws, etc are also involved while operating online casinos, onlinegambling and betting and online gamming platforms.  The provisions of these economiclegislations are very stringent in nature and can cause great detriment to the owneror operator of the online casino, gambling and betting website.

To be on a safer side, it is better to comply with various techno legal laws ofIndia while opening an online gambling, gaming and betting platform rather thanfacing the punitive provisions of Indian laws.

Source: E-Commerce Laws and Regulations In India.

This entry was posted in Uncategorized on November 28, 2013 by PTLB.

Online Gambling Laws And Regulations In India

Online gambling in India has aroused great interest amongmany e-commerce entrepreneurs of India. This is because online gambling is a veryremunerative and profit oriented business. However, online gambling is also acomplicated business filed as many laws and technical issues have to be resolved atthe same time.

We have a central law on gambling called the Public Gambling Act of 1867. Similarly,we have many state laws on gambling that are mostly based upon the central law.Further, almost all the state laws are regulating real world or offline gambling inIndia. The exception in this regard can be found in the laws applicable in placeslike Goa and Sikkim.

Recently Goa has made its casino laws very stringent keep in mind the moneylaundering, black money and tax evasion issues in mind. Similarly, Sikkim is also inthe process of harmonising its laws with the central laws.

As far as judiciary is concerned, the Supreme Court of India has made a distinctionbetween skills based and chance based gaming activities. Of course, each casedepends upon its own facts and circumstances and the respective state law and wecannot apply one decision uniformly in all cases of gambling and online gambling.

The e-commerce laws and regulations in India are still at the infancy stage. As amatter of fact, a majority of e-commerce portals and players in India are notfollowing the laws of the land in true letter and spirit. Surprisingly, there is ageneral misconception among the e-commerce players of India that for running an e-commerce website in India they need not to follow much law. On the contrary, thereare well recognised legal requirements to start an e-commerce website in India andthe legal formalities required for starting e-commerce business in India.

The chief among these e-commerce players are online pharmacies, online gambling andgaming portals, electronics e-commerce websites, etc. They fail to understand thatuse of technology has brought additional legal issues that are primarily technolegal in nature. Their continued ignorance may bring civil, criminal and financialpenalties. The recent spate of FDI crackdowns by India government proves this point.

At Perry4Law and Perry4Law’s Techno Legal Base (PTLB) we believe that cyber law duediligence, Internet intermediary liability and cyber due diligence for Indiancompanies must be kept in mind by various e-commerce websites and players. The skilland chance and state subject legal arguments are not sufficient to comply withcomplicated techno legal requirements of India as on date. So before launching an e-commerce portal, the concerned person or company must make it sure that techno legalrequirements are duly complied with.

Source: E-Commerce Laws And Regulations In India.

This entry was posted in Uncategorized on November 28, 2013 by PTLB.

Online Gambling Laws In India

The online gambling laws and regulations in India is a tricky andcomplicated subject. We at Perry4Law receive numerous legal consultancy requestsregarding legality of online gambling in India. The first question that owners ofpotential online gambling websites in India ask reads is online gambling and bettinglegal in India?

An online gambling website has to follow at least two different sets of laws. Theseinclude the gambling laws of India and the cyber law of India. Since the gamblingactivity is planned to be conducted through a website and in an online environment,the information technology act, 2000, which is the cyber law of India, has to bereligiously followed.

There are well recognised legal requirements to start an e-commerce website in Indiaand the legal formalities required for starting e-commerce business in India.However, in the zest of earning profit, e-commerce websites are not following thelaws of India. In these circumstances, e-commerce websites frauds, offences andcrimes in India have increased a lot. They are also not following the cyber law due

diligence requirements of India and are liable for Internet intermediary liabilityin India.

E-commerce websites dealing with online pharmacies, online gamming and gambling,online selling of adult merchandise, etc are openly and continuously violating thelaws of India, including the cyber law of India. However, India government has yetto take action against these offending e-commerce websites of India. The e-commercewebsites in India must be regulated by Indian government as soon as possible.

As far as gambling in India is concerned, we have a central law on gambling known asPublic Gambling Act of 1867. Similarly, we have many state laws on gambling that aremostly based upon the central law. Further, almost all the state laws are regulatingreal world or offline gambling in India. The exception in this regard can be foundin the laws applicable in places like Goa and Sikkim.

Recently Goa has made its casino laws very stringent keep in mind the moneylaundering, black money and tax evasion issues in mind. Similarly, Sikkim is also inthe process of harmonising its laws with the central laws.

As far as judiciary is concerned, the Supreme Court of India has made a distinctionbetween skills based and chance based gaming activities. Of course, each casedepends upon its own facts and circumstances and the respective state law and wecannot apply one decision uniformly in all cases of gambling and online gambling.

The skill and chance and state subject legal arguments are not sufficient to complywith complicated techno legal requirements of India as on date. So before launchingan e-commerce portal, the concerned person or company must make it sure that technolegal requirements are duly complied with.

Source: CCICI.

This entry was posted in Uncategorized on November 28, 2013 by PTLB.