Nagaland has become the first Indian state to regularize online cash games like poker, rummy and daily fantasy sports. In 2015, the state assembly passed The Nagaland Prohibition of Gambling and Promotion of Online Games of Skill Bill which is the first law of its kind in India. The bill which is awaiting approval by the Governor, addresses the regulation and licensing of online games that require substantial skills like poker, rummy and fantasy sports while at the same time banning games that are purely based on luck and chance.
In a statement, Mr. Vaibhav Gaggar, Managing Partner of the law firm M/S. Gaggar and Associates said, “This Bill being the first of its kind in India and perhaps even globally should give a huge impetus to the Industry in India. Most importantly, this Bill should help the Poker Industry come out of the shadows and boldly claim its place in the gaming industry in India.” Mr. Gaggar further predicted a coming boom for the poker industry in India.
The Supreme Court of India laid down the “preponderance of skill” test which is used to check whether a game falls under the gambling or sports category. The test sees whether a wagering game is predominantly dependent on luck and chance or if the player has to apply skills like strategizing while placing the wager, analyzing the situation and using mental or physical skills while making a bet. According to Nishith Desai of Nishith Desai Associates, this bill adheres to the test laid down by the Supreme Court.
In India gambling is prohibited in just about every state. However this bill affirms the notion that games like rummy, poker and fantasy sports should not be termed as gambling but deemed as sports related since they require a particular skill-set. According to Mr. Gaggar, this new bill will have a lot of positive effects such as reducing the stigma on the game of poker, bringing in well-known operators into the country and improving customer confidence due to regulation.
Since Nagaland is the first state in India to legalize online cash games, Mr. Gaggar remains confident that a number of other states will soon push for the legalization of online cash games as well. The new bill focuses on promoting online poker in India and will require each operator to be incorporated in India or have a controlling stake in an Indian based company.