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  • Online Skill Gaming is NOT Gambling: Break the Bias

    Published on June 23, 2022

    Despite the Supreme Court having ruled in favour of online games of skill, confusion still exists regarding its status. It’s time to unshackle this sunrise sector from the bias that exists against it. The autonomy of misinterpreting the socio-economic role of this sector is certainly detrimental to its growth potential.

    For decades now, various courts have distinguished between games of skill and games of chance. Therefore, the former cannot be classified as gambling. For instance, with reference to the State of Bombay v. RMD Chamarbaugwala, AIR 1957 SC 699: The Supreme Court of India held that – “It will suffice to say that we agree with the Court of Appeal that a competition in order to avoid the stigma of gambling must depend upon the exercise of skill. Therefore, a competition’s success which does not depend to a substantial degree upon the exercise of skill is now recognised to be of a gambling nature.”

    Besides, the Madras High Court condemned the Tamil Nadu government’s amendment of the Gaming Act that allowed banning of online games with stakes. Chief Justice Sanjib Banerjee and Justice Senthil Kumar Ramamoorthy deemed this as unconstitutional and a violation of Article 19(1) (g) of the Constitution of India (right to practice any profession, or right to carry on any occupation, trade or business).

    The juxtaposition between online games of skill and online gambling clearly establishes the former’s integrity in terms of its skill-based potential unlike the latter that is a sheer outcome of chance. The ‘chance’ factor in online games of skill is redundant as outcomes are featured by a participant’s domain knowledge, logical analysis, and interpretative techniques—none of which are determinants of ‘luck’.

    From creating an entertainment space to generating employment, bolstering the growth of the AVGC (Animation, Visual Effects, Gaming and Comic) sector, online games of skill directly correlate with the Prime Minister’s vision of building a ‘Digital India’. In fact, following Finance Minister Nirmala Sitharaman’s announcement of a specialised task force being set up to monitor this sector, an Inter-Ministerial Task Force (IMTF) has come into play where specific ministries will collaborate to ensure a centralised system of seamless regulation.

    Further evidence of the credibility of online skill-based games was gathered through a study at MIT (Massachusetts Institute of Technology). A robust statistical framework was used for empirically evaluating the hypothesis of ‘luck’ to test whether outcomes are games of skill or chance. Interestingly, with existing data sets for millions of events in place, it concluded that selecting a team of fantasy sports requires significant levels of skill.

    The digital nature of online gaming platforms fosters the growth of multisport ecosystems across social echelons. A blanket ‘ban’ is therefore definitely not the best solution.

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