By Arsh Singh, 4th year at Army Institute of Law, Mohali, Punjab
Introduction
Internet Gambling refers to the range of wagering and gaming activities offered through various devices such as laptops, phones and even the television. Internet gambling or Online Gambling as it is often referred to as is not a different type of gambling but rather a mode of access that is distinct enough to constitute its own category. The ability to place large wagers, getting faster results, easier access combined with the comfort of doing all this from your home has made this type of gambling a very lucrative and profitable business, although at the same time it creates a boom in the already chronic problem of gambling addiction. There are more people playing over the Internet today than ever before and most of the new players choose online casinos. With serious money at stake; online casinos also have to heavily worry about the cybersecurity of their websites not to mention that the data privacy of the player is also at stake here.
Problems Created by Online Gambling
It can be said without a doubt that online gambling has grown exponentially over the past few years. The online global gambling market was valued at $6.1 bn in 2013 with an expected annual growth of 10.1% till 2018[1] and while it is great economically its social implications are far from acceptable. The easy access, constant availability and the privacy provided by online gambling platforms make these mediums so addictive that it has led players to report disruption in their sleep and eating patterns and even more so than offline gamblers.[2] The problem is that online gambling tends to create in the communities, can majorly be seen in the following examples:-
1. Internet gambling in the workplace has become a huge problem as it may lead to frustration, loss in motivation, less productivity and unnecessary division of attention. Gambling online is an activity that can be done in total privacy without arousing any suspicion and hence can be done easily by the individual. Many companies have suffered heavily because they had to fire people who went to the extent of siphoning the funds of the company to satisfy their addictions.
2. Many studies in Australia and the United Kingdom have found that cyberspace gambling can become a gateway to other internet-related problems such as porn addiction, gaming addiction and even shopping addictions. These problems sound inconsequential and relatively harmless but addiction to anything can have harmful psychological and physiological effects.
3. Another feature of online gambling which usually goes unnoticed is the provision for providing e-cash. Gambling with e-cash has a high chance of leading a person to a point which is called a suspension of judgment which has been proved to promote further gambling. This phenomenon is considered to be one of the biggest if not the biggest proponents of gambling addiction, this leads to disruption in the financial value system as well. We tend to spend tokens and chips without hesitation as we do not value that as real currency.
4. Online gambling addiction like any other addiction preys most on the weak and the vulnerable who in this case are adolescents, gambling addicts, drug addicts. These people in the general course of life would not be allowed to gamble by their friends, family or the authorities but this system of checks and balances easily falls apart in online gambling. People lie about their age, financial status and sometimes even gender, doing anything to get an edge over the other players. This also incentivizes them to try and hack the system or compromise it in one way or another so as to make a profit. The case of rash decision-making can especially be seen in kids and young people but is not limited to them as many working professionals also have had to declare bankruptcy due to their gambling habits.
5. Even in the late 90’s when online gambling had not found this humungous fan following people had their doubts on the very same points that have been mentioned above and there were even estimates that the online gambling market will make the government lose money and hence is not beneficial from a capitalistic point of view- a classic lose-lose situation[3].
Data Protection and Need for Legislation
Online gambling like any other business inevitably processes the data of their customers, the protection of this private data is what is the most important and risky task for the companies. It also has to be wary of hacking as the result of one person controlling ‘a game of chance’ is that people will lose money unnecessarily, despite popular belief there is a dire need for separate legislation on this topic and basic data protection sometimes just doesn’t cut it. A good example of the same is that the European Gaming and Betting Association(EGBA) published a Data Protection Code of Conduct for Online Gaming Operators for the European Union; this body has seen varied success due to its concentrated view[4]. Indian laws in this respect are more than lacking and need immediate action. Except for Maharashtra and Sikkim[5], all states are silent on this matter and therefore give people an almost free rein to do whatever they want which only compounds the problems that have been discussed earlier. Some necessary changes that are needed to be incorporated from the EU are:-
1. Operators do not make the supply of services conditional on player consent to data processing. It does, however, say that operators can incentivize consent, for example, to receive marketing emails about bonus promotions, provided there is no penalty for not consenting. It underlines that the lack of receipt of a reward or bonus does not constitute a penalty.
2. Subjects for a legitimate internal assessment which include:
system testing and security measures
detection of player account fraud
Analytics of trends and forecasting within the player database (assuming this is non-cookie based)
call recordings for quality assurance and potential dispute resolution
customer segmentation for promotions and direct marketing purposes – for example, knowing which customers are sportsbook as opposed to casino
establishment of VIP status based on game history for the purpose of offering special benefits to customers
Chatbot to direct customer queries or requests to the relevant person.
Indian Scenario
Sikkim is the only state to have made laws on this topic with the Sikkim Gaming Act of 2008 and making amendments to the same, Maharashtra, on the other hand, has outright made it illegal under the Bombay Wager Act. The Madras High Court held that Rummy played for stakes would constitute gambling but this decision was overturned by the Apex Court. Recently in the case of D SiluvaiVenance v State [6]the Hon’ble Supreme Court raised the questions on the Madras state government and asked them as to why are there no laws on online gambling. In the case of Indian Poker Association v. the State of Karnataka[7], the Bangalore High Court held, “In respect of the game of poker, if played as a game of skill, the license is not contemplated”.Lotteries which are entire games of chance are permitted in many states, albeit strictly regulated and looked upon by law and courts as a disastrous ‘evil’ in accordance to the Lotteries (Regulation) Act, 1998,. In the case of All Kerala Online Lottery Dealers Association Vs. State of Kerala[8] it was held by the Apex Court that it was constitutionally valid to discriminate between online and paper lotteries as two distinct classes of lotteries in terms of the Lotteries (Regulation) Act and therefore, a state government may ban online lotteries regardless of the fact that it may be conducting paper lottery schemes. It has been observed by the apex court that as long as a state does not itself conduct a particular class of lotteries, it may ban within its territory that class of lotteries conducted by other states. Despite its current stance the Supreme Court has not said anything with regard to the recent interest of the Punjab Government to start online lottery schemes.
Conclusion
We live in the world of a technological boom, no other industry has grown at the speed and scale as that of the technological industry. Just 10 years back smart phones had touch screens that barely worked and 20 years back the internet felt like an elitist commodity. None of that is true today, unfortunately, the law has not been keeping pace with this and as a result, people suffer. Online gambling is a threat we are not paying attention to. It combines two of the most addicting things in the world right now, gambling and the internet and has packaged it into a neat product for us to gorge on. Airtight and strong legislation is imperative even if it needs constant amendments, for concrete legislation we need a smashing start.
References
[1]Global Betting and Gaming Consultants. Global Gaming Report (6th ed.). Castletown, Isle of Man, British Isles: Author; 2011. [2]Siemens JC, Kopp SW. The influence of online gambling environments on self- control. Journal Public Policy Mark. 2011;30:279–293. [3]Cyberspace Gambling https://www.washingtonpost.com/wp-srv/national/longterm/intgambling/stories/oonline082597.html [Accessed on 12 Sep. 2020] [4] Data Protection in Online Gambling, Debbie Haywood https://www.egba.eu/uploads/2020/06/200610-Code-of-Conduct-on-Data-Protection-in-Online-Gambling.pdf. [Accessed 10 Sep. 2020] [5]Read Bombay Wager Act and Sikkim Online Gaming Act, 2008 respectively. [6](Crl OP (MD) No. 6568 of 2020). [7] Writ petition WRIT PETITION NOS.39167 TO 39169 OF 2013 (GM-POLICE). [8]CIVIL APPEAL NO. 3518 OF 2007.
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