Laws & Registration

Maharashtra Plans to Regulate and Tax Online Gaming by Amending 4 Laws

Maharashtra Plans to Regulate and Tax Online Gaming

The Maharashtra State Home Department has accepted for consideration a proposal by Nashik Commissioner of Police Deepak Pandey for a total of 19 amendments in 4 acts with the aim to regulate and tax online gaming in the state, and battle online gaming fraud. The proposal was sent to answer a request by the state government through the Director General of Police in Mumbai seeking the opinion of the Nashik CP on necessary changes to the existing legislation relating to online gaming.

According to Pandey’s words, the initiative was motivated by the spiking of various gaming apps and platforms of recent years, including fantasy sports, rummy, poker, online roulette and many others, which have so far remained unregulated. “We are witnessing a spurt of online games in Maharashtra and India. Lots of online gaming apps are coming up, but none of them has been approved by any government authorities,” Nashik Commissioner of Police said.

Proposal Focused on Increasing Tax Revenues and Fighting against Online Gaming Fraud

The proposal sent to the Mumbai DGP envisages online gaming companies to be taxed at 25 percent of their income and estimates an immediate revenue collection of ₹2,000 crore and ₹10,000 in the next few years. At the same time, Nashik CP proposes maximum penalties of seven years of imprisonment and ₹10 lakh fine for online gaming fraud, as well as three years of imprisonment and ₹10 lakh fine for online-based card extortion.

The recommended measures include the creation of an office of a State Lottery Commissioner to be mandated to supervise the whole span of online gaming activities starting from operator or game registrations. The new office will have authority to monitor online gaming operations for violations of the law and register such offenses.

Consumer Protection Measures Could be Improved by Adding Responsible Gaming Requirements

The proposed amendments to four active laws in Maharashtra seeking to regulate online gaming in the state have two main focal points: enhancing revenue collection with a sizable amount to help the state’s economy that was drained by he Covid pandemic, and to enhance customer protection with measures against online gaming fraud and card extortion. A concise overview of contemporary global trends in gaming and gambling regulations, on the other hand, reveals a focus on responsible gaming measures and rules around the world which are altogether missing from CP Pandey’s proposal.

Besides protection against fraudulent gaming operators, odds tampering and unfair money losses, the gaming regulations in countries like the UK, Sweden, Denmark, France and many others seek also to shield the public from various other risks related to online gaming, gambling and betting.

Generally grouped under the heading of Responsible Gaming, these rules require operators to implement mechanisms to address addictions and other problem gambling with tools like self-exclusion systems, AI-based behavior monitoring, limits on betting amounts, time spent and speed of gaming, banning of gambling on credit, quick access to professional mental health support and others.

The Amendments Proposed in Maharashtra in Detail

In more detail, the proposal provides for the addition of a definition of ‘online gaming’ in the Maharashtra Lotteries (Control and Tax) and Prize Competitions (Tax) Act of 1958 and declaring illegal online gaming a cognizable, non-bailable and non-compoundable offense within the jurisdiction of the session courts.

CP Deepak Pandey further recommends online gaming to receive a definition also in the state’s Prevention of Gambling Act of 1887 with corresponding punishment for unauthorized online gaming. The other laws proposed for amendments are the Maharashtra Prevention of Dangerous Activities of Slumlords, Bootleggers, Drug Offenders, Dangerous Persons and Video Pirates Act of 1981 (MPDA) and the Maharashtra Control of Organised Crime Act (MCOCA) of 1999.

“Due to the lenient nature of the existing laws against gambling, a proposal was sent to the state DGP citing the need for amendments in various acts to keep a check on online gaming. Against this backdrop, we got a letter from the government through the office of the state DGP enquiring about the Acts that needed amendments and where the changes are required. In response to the same, I have suggested recommendations about the amendments in various acts recently,” the Nishak Commissioner of Police explains the forming of the proposal.

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