Center Defends Online Gaming IT Rules before Delhi HC

Public Interest Litigation Challenges Legality of SROs

In a situation complex enough to necessitate the recent appointment of a new GoM (Group of Ministers), several discrepancies exist. These discrepancies are between the views towards online gaming of several Union Ministries. The government must resolve this complexity before putting the long-awaited SROs (Self-Regulatory Organizations) into operation. Meanwhile. A Public Interest Litigation at Delhi High Court has forced the Center to defend the framework´s legality. This framework was supposed to serve as the basis for the functioning of these SROs.

In the latest development on the case, MeitY (the Ministry of Electronics and IT) submitted its response to the allegation. The allegation stated that the Central Government had exceeded its legal competence. This was by attempting to regulate online money games. According to the State List, gambling and betting fall within the States’ legislative ambit.

“Entry 31 and Entry 97 (residual entries) of the Union List allow the central government to legislate on matters pertaining to online gaming,” MeitY’s affidavit stated.

The central government has the legislative competency to enact any law on online gaming. In this particular instance, it enacted the impugned amendments in the IT Rules, 2021,” the document added.

For reference, Entry 31 of List I – Union List, Constitution of India, Seventh Schedule, lists matters within the exclusive legal competence of the National Parliament. This includes: “Posts and telegraphs; telephones, wireless, broadcasting and other like forms of communication.”

The final Entry 97 adds: “Any other matter not enumerated in List II or List III, including any tax not mentioned in either of those Lists.”

The Arguments Brought Forth by the PIL

Noida-based NGO Social Organisation for Creating Humanity (SOCH) filed the PIL on the 1st of July 2023.

And besides questioning the Center’s legal competence. The petition claimed that the Union Government had created “regulatory confusion.” The implementation of a new set of legislative acts running parallel to the existing laws created this confusion.

“The Rules outsource regulatory powers of the State to SRBs, which would be financed by online gaming companies with a vested self-interest in the regulation of the community, is wholly irrational, arbitrary and violative of Article 14 of the Constitution,” the petition by SOCH also raised concerns about the whole idea of self-regulation as it exists now.

“The Government cannot abdicate its role of overseeing and monitoring of the online gaming sector and outsource its responsibility to private bodies,” SOCH argued.

In its recent written response, MeitY pointed out that MeitY drew up the amendments after extensive consultations.

These consultations included the industry and other stakeholders. The functioning of SROs would be within a broader framework.

This framework protects customer safety and foster a favorable business climate.