Salient Features Of The Nagaland Prohibition Of Gambling And Promotion And Regulation Of Online Games Of Skill Act 2016

Recently the Nagaland Prohibition of Gambling and Promotion and Regulation of Online Games of Skill Bill, 2015 (“Bill”) was made an applicable law. Now the government is in the process of formulating rules for the same. Perry4Law Organisation (P4LO) has contacted the Nagaland government and has requested for the official documents in this regard so that we can share the same with gaming stakeholders. For the time being, Perry4Law Law Firm has provided an analysis of the Nagaland Gaming Act, 2016 based on the publicly available information and inputs. Please see the Nagaland Prohibition of Gambling and Promotion and Regulation of Online Games of Skill Bill 2015: Salient Features (pdf) for the complete analysis.

Some of the salient features of the Nagaland Gaming Act, 2016 are as follows:

(1) The Act allows games of skills and prohibits games involving gambling elements.

(2) Some games have been specifically included in games of skill and this would reduce the confusion about the nature of gambling activities. However, inherent conflicts and inconsistency is there in the provisions of the Act and this would create problems for the gaming stakeholders in future.

(3) Severe fines have been prescribed by the Act for gambling activities. For instance, a fine of Rs 20 lakhs will be applicable in the first instance, followed by an imprisonment of 6 months if not remedied further.

(4) Games which have been declared by courts (Indian or International) as games of skill may be included in this list in future. The Finance Commissioner or any Licensing Authority will be permitted to add to this list the games of skill as long as it is in consonance with the definition of ‘Games of Skill’ under the Act.

(5) The Act applies to any territory in India in which “games of skill” are permitted and are recognised as being exempt from the ambit of “gambling”.

This would raise serious legal issues as till now the legality of games like online poker, online rummy, e-sports, fantasy sports, online card games, online fantasy games, online lotteries, etc is not clear.

P4LO has been managing a Blog titled Online Gaming And Gambling Laws And Regulations In India to help online gaming and online gambling stakeholders of India and other jurisdictions. This Blog can be used as a guidance by the gaming stakeholders and if they need our techno legal professional assistance, they can establish a client attorney relationship and seek our services.

(6) Indian place of business and Indian connections are essential for getting a licence from the Nagaland government. An interest in any online or offline gambling activities in India or abroad would bar an individual or entity from getting the licence.

(7) The State Government, may, by notification, designate an authority or body to monitor and regulate the activities of all licensees to ensure compliance with the provisions of this Act, and to settle all disputes arising from the activities conducted under this Act

(8) If the licensee operates in a state where the state government believes the company is violating the provisions of the act or its rules, or in violation of local laws, it may inform the licensing authority of Nagaland. The licensing authority shall then try and get the issues resolved.

P4LO welcomes this legislation from Nagaland government. However, there are certain techno legal issues that have skipped the attention of government of Nagaland. It would be prudent to cover those issues before the rules are notified by the Nagaland government.