The High Court of Allahabad has directed the Uttar Pradesh government to constitute a high-powered committee to examine whether there was a need to regulate online gaming & betting.
Justice Vinod Diwaker's direction came after he observed that the existing Public Gambling Act, 1867 was a colonial-era law that addresses only conventional forms of gambling like card games.
The court said the panel would be headed by Professor K V Raju, the economic advisor to the Uttar Pradesh government & may include the principal secretary as member secretary besides other experts as members.
The direction came after two persons, including one Imran Khan, sought quashing of gambling charges & criminal proceedings.
The duo was accused of running an online betting racket from home & earning crores of rupees leading the locals in Agra to gamble away their earnings.
The court observed a law must be enacted to meet the transformative changes in online betting & gaming & took a suo-motu cognisance of the issue.
"The Public Gambling Act is a pre-digital law. It makes no mention of digital platforms, servers, or cross-border transactions. Its enforcement is limited to physical gambling houses & has no jurisdiction over virtual gambling environments accessed via mobile phones, computers, or offshore servers," it added.
The court observed in the era of online gambling, the existing law has lost its impact & relevance, as there exists no definition or regulation of online gambling.
It also highlighted that the law presently only provides for negligible penalties, which do not deter large-scale operations.
"There is a lack of clarity on the legal status of fantasy sports, poker, & e-sports. Jurisdictional issues also arise, as online platforms operate across state, national, & international boundaries," the court added.
Fantasy sports in India are stated to be in a legal grey area, straddling the line between games of skill & games of chance .
The court also flagged the use of psychologically manipulative algorithms, reward systems, & notifications by online gaming platforms to encourage prolonged use.
This has led to a rise in gaming addiction, anxiety, depression, & social isolation, especially among adolescents & young adults, it said.
"Students are increasingly distracted by online gaming, often at the cost of their academic performance & family relationships. The disruption of sleep cycles, lack of discipline, & social withdrawal are common consequences," the court added.
The judge noted several online betting operations function outside India's jurisdiction, with servers located abroad & transactions routed through unregulated channels.
This poses challenges for law enforcement & increases the risk of money laundering, financial fraud, & terror funding, it observed.
A modern, technology-sensitive legislation was therefore urgently needed to address the psychological, social, & national security implications of online gaming, it added.
On the merits of the case against the accused, the court observed since it involved a non-cognisable offence, the police could not have probed it without an order of the magistrate.
The court in its decision passed last month quashed the proceedings against the accused but the police was granted the liberty to initiate a fresh investigation after complying with the law.
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