Wednesday, May 18, 2016

Mobile Gaming Market And Business In India And Legal Issues And Challenges

Mobiles have become ubiquitous in India and they are practically being used for every aspect of our day to day activities. Mobile gaming is just one example of use of mobiles by Indians. However, use of mobile have given rise to very complicated techno legal issues that require a techno legal framework to manage them. The truth is that mobiles and mobile related activities cannot be handled by the Information Technology Act, 2000 (IT Act 2000) anymore and we need dedicated mobile phone laws in India. This is more so when the mobile gaming market in India is fast growing.

Gaming industry of India was confined till recently to physical games only. However, with the advent of information and communication technology (ICT), Internet based and mobile games have fast emerged. For instance, online rummy, online poker, online card games, etc are very popular these days. Even online lotteries have become very common these days in various states of India. However, online gaming industry of India received a major setback when both the Central Government and Supreme Court of India refused to clarify upon the legality of online games in India.

As per the research and reports of various organisations, online gaming and mobile gaming market of India is set for big growth. Many foreign companies have also shown their interest in exploring the Indian gaming market. However, only those stakeholders would be benefited from the same who are in compliance with the techno legal requirements of mobile gaming laws of India. Besides techno legal issues, online gaming and mobile gaming providers would also be required to introduce the element of “localisation” to make their online games successful. Text translation, dialogue dubbing and character outfits are among the most common tweaks in the “localisation” work by firms wanting to capitalise on Asia’s booming online gaming market. However, the term localisation is not confined to mere commercial aspects but it covers legal issues as well. This means that local laws are also required to be complied with by Indian and foreign online gaming service providers.

Many global gaming entities have also opened offices in India or have signed distribution agreement with leading Indian mobile game developers to distribute their products in India. While operating gaming business is easier in some countries of the world where gaming is legalised yet the situation is not so easy in India where the laws are stringent. India is still struggling to deal with issues of mobile payments and mobile application development laws and this has further complicated the scene.

The Constitution of India empowers the State Legislatures to frame state specific laws on betting and gambling under the List II, Entry No. 34 of Seventh Schedule. The Public Gambling Act, 1867, is a central enactment on the subject, which has been adopted by certain states of India. The other states in India have enacted their own legislation for regulating gaming activities within its territory. However, this was an easier task for the states as most of these laws were made applicable to physical games that could be easily confined to the territories of a particular state. Internet and ICT has obliterated this territorial limits and now online or mobile gaming activities of a state can be made available to another state. This not only is illegal but is also a direct violation of the legislative powers of the states who do not allow such online or mobile games.

Many online games or mobile games entrepreneurs believe that physical games legal concepts and judgments can be automatically applied to online games or mobile games. However, this is a wrong assumption and can give rise to various forms of legal prosecutions. We at Perry4Law Law Firm firmly believe that online games and mobile games are totally different from physical games and it is a serious legal fallacy to blindly apply the test of skills v. chance to online or mobile games. The test is just one of the factors and relying solely upon this test would surely attract legal sanctions.

There are very few players as on date in the mobile gaming industry of India. However, these players have to resolve many techno legal issues before they can establish their businesses in India. These include mobile payment compliances, payment gateway and POS terminal service due diligence, websites development compliances, Internet intermediary obligations, cyber law due diligence (pdf), etc.

Perry4Law strongly recommends that online and mobile gaming entrepreneurs and businesses in India must ensure techno legal compliances before launching their respective ventures in India. Avoiding these techno legal compliances would prove counter productive in the long run.

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