A recent report by ET states that a Noida-based NGO has filed a Public Interest Litigation (PIL) in the Delhi High Court, challenging the constitutional and legislative validity of the Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Amendment Rules, 2023, specifically pertaining to online gaming.
Quoting the PIL, the report highlights that the NGO, whose name was not disclosed, argued that the Centre has exceeded its legislative competence by enacting these rules. The NGO cited exclusive powers given to states for legislating on gambling and betting under the Constitution, asserting that the Centre has encroached upon these powers.
The NGO expressed concerns about the resulting regulatory confusion caused by conflicting laws governing online gaming. Industry stakeholders are reportedly uncertain about which set of regulations to follow due to this ambiguity.
Furthermore, the NGO raised objections to the establishment of Self Regulatory Bodies (SRBs) by the government. The PIL stated that the rules transfer regulatory powers from the state to SRBs, which are funded by online gaming companies. The NGO deemed this arrangement arbitrary, irrational, and violative of Article 14 of the Constitution.
The NGO argued that the rules categorize online gaming, including online real money games, as ‘intermediaries’ under the IT Act, 2000, and impose various due diligence requirements. This includes KYC verification, the appointment of grievance redressal and nodal officers, and registration and membership with SRBs.
According to the NGO, the Ministry of Electronics & Information Technology’s exercise of power in enacting and notifying these rules is contrary to public interest and places a financial burden on the public without effectively addressing the issue of online gambling.
The PIL comes at a time when the regulatory landscape for online gaming in India remains ambiguous. While the government has attempted to bring legitimacy through taxation, the classification of games of chance and skill continues to be a highly debated and controversial topic. Different state governments interpret these games differently, leading to actions such as Tamil Nadu’s ban on online games, which is currently being contested by companies in court.
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