25 Sep 2012

Delhi Court opinion on online gaming: 15 new facts emerge through landmark opinion, download copy of the verdict

Exclusive The opinion of the Delhi district court on online gaming created a huge uproar with major media houses in India and abroad widely reporting the decision.

However, it has emerged that the observations of the court in this matter were merely the opinion of the court in a private matter between parties.

Here are the top 15 salient features of the opinion of Judge Ina Malhotra:

1. The opinion was sought by M/s Gaussian Network Pvt. Ltd. in an agreement with investors under Order 36 of the Code of Civil Procedure , 1908.

2. Under Order 36, opinion of the court can be sought on any legal ambiguities by agreement of parties. Decision of this order is non-appealable. However, the petitioners have already indicated that they are unhappy with this opinion. The petitioners have already approached the Delhi High Court demanding revision of the order of the learned Additional District Judge.

3. Opinion of the court in this matter is binding only upon the parties and shall not have any impact on other persons who were not involved with the matter, although this opinion might have persuasive value on any other related matter before any court.

4. Seven questions were placed before the court for its opinion. The questions involved legality of games of skill, legality of online games for cash, constitutional right to establish businesses of games of skill, penal provisions relating to online gambling, advertising online gaming and payment gateways for online games of skill.

5. The court held that online games of skill do not have the constitutional protection of Article 19(1)(g) and are outside the scope of trade and commerce.

6. The court also declared that online gaming or offering online games of skill may fall within the ambit of “common gaming house” and has potential criminal liability, though it offered no further opinion on the interpretation of current laws relating to gaming.

7. The court differentiated between games of skill in the physical form and the same games played online. According to the court, skill involved six parameters: ability, strategy, physical co-ordination, technical expertise and knowledge. Since some of these parameters are lacking in case of online games, the court opined that even declared games of skill cannot be played for stakes/profit online, though there may be no bar on doing so physically. It was held that playing games through a ‘click of the mouse’ cannot be included under the ambit of skill.

8. Judge Malhotra clearly disapproved online skill games offering real cash prizes terming them as “no different from physical casinos.”

9. The court however held online websites offering games of skill without the element of cash to be legal as per Indian law.

10. The court also declared advertising on such websites to be illegal as per Indian law. Additionally the court disapproved advertisements of skilled game portals on other websites.

11. Payment gateways and Banks were free to not provide any services to these online gaming or skill games websites.

12. The court also made adverse remarks against the Delhi government for not appearing in the matter despite being made a party. Strictures were passed against the government for the lacunae in existing laws regarding online gaming.

13. The court refused to accept the argument that poker is a game of skill and was more inclined to hold poker under the ambit of gambling.

14. The court confirmed that physical poker games can be conducted in the state of West Bengal due to exemption provided in The West Bengal Gambling and Prize Competition Act, 1957.

15. Filing of writ petitions and other legal remedies are possible against the opinion of the Court to clarify the legality of hosting games of skill online. Though this is a landmark opinion as various issues and grey areas in gaming law have been addressed by a court of law in India for the first time, there are various lacunae in interpreting the existing laws comprehensively. Alternative interpretations to the observations of the court is possible.This verdict should therefore not be regarded as conclusive of the legality of poker and online gaming as well as skill games.

Further developments in this regarded are anticipated in the near future specially as the petitioners have already approached the Delhi High Court on this issue.

Note: A copy of this judgment of the court can be accessed here.

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