Advertising Games of Chance: Legislative Gaps in India’s Gambling Laws

Introduction

From its very first mention in the oldest text in the Indic civilization, the concept of gambling has been looked upon as one that swallows people into the throw of dice, ruining not just their lives but the lives of those around them. Modern India has since then continued the stigmatization of the vice. The 2017 Varun Gumber case saw the horizons open for gamified gambling in India, with the Supreme Court allowing games of chance, which has an element of luck in it. This saw the industry boom to over $2.7 Billion evaluation in 2023. The ASCI, in line with India’s prevailing legislative intent, released its guidelines, virtually banning the advertisement of online games with real money winnings in 2020. Despite these restrictions, the proliferation of gambling advertisements is evident, not just on mainstream platforms but also on illegal websites and within other unregulated digital spaces.
The authors, through this paper, aim to elucidate the multiple gaps in the Indian legislation that have allowed the betting market to thrive and further suggest a novel solution suitable for blending in the present legal framework. The authors then illustrate the nexus that such gambling houses have to illegal platforms in India and how they exploit psychological vulnerabilities.

Present Indian Framework and its Shortcomings:

India’s current legal framework for regulating gambling and betting is a patchwork of central and state laws that struggle to keep pace with the evolving nature of online gambling, particularly in its gamified forms. The primary legislation at the national level is the Public Gambling Act of 1867 (PGA), which broadly criminalizes gambling while leaving certain exceptions to the discretion of state governments. Despite the general prohibition on gambling under the PGA, many offshore betting and gambling companies continue to target Indian users, exploiting gaps in the regulatory framework. The Information Technology Act of 2000 attempts to address some of these challenges by granting the government authority to block access to websites that promote gambling. Section 69A of the IT Act specifically empowers the Indian Computer Emergency Response Team (CERT-in) to block websites that host or promote gambling content. However, this mechanism is largely reactive, coming into play only after the content is already accessible, which limits its effectiveness. The Information Technology (Intermediaries Guidelines and Digital Media Ethics Code) Rules, 2021 take a more proactive approach by imposing responsibilities on intermediaries such as social media platforms to prevent the promotion or advertisement of gambling services on their platforms. While this shifts some of the regulatory burden onto third parties, enforcement remains uneven, and the effectiveness of self-regulation by these intermediaries is questionable, given the sophisticated marketing strategies employed by online gambling platforms.

In addition to content regulation, the financial transactions associated with online gambling are subject to oversight under laws such as the Payment and Settlement Systems Act 2007 and the Consumer Protection Act 2019. However, the application of these protections to online gambling is murky, as the distinction between gaming and gambling can often be blurred, especially in gamified platforms where elements of chance and skill are intertwined. Rule 7(1) of the Cable Television Networks Rules, 1994, mandates that advertisements on cable services must comply with Indian laws and should not offend public morality, decency, or religious beliefs. Moreover, Clause 3.5 of Chapter III of the ASCI Code, which is incorporated into the Cable Television Networks Rules, explicitly prohibits advertisements promoting products or services banned under the law, including gambling. Penalties for violating these guidelines include fines and bans on endorsements, but enforcement is slow, and the penalties often lack the deterrent effect needed to curb such practices.

Despite the multiple levels of regulation and seemingly all-encompassing legislation, betting and gambling platforms continue to find ways to circumvent these laws. Two primary strategies used by these platforms are surrogate marketing and brand extension, both of which allow them to indirectly promote their services while staying within the technical bounds of the law.

Surrogate advertising, or indirect advertising, is a tactic where companies promote a seemingly unrelated product under the same brand associated with a prohibited service. This involves using a brand name or imagery linked to an offshore betting site to advertise a different product, often one with little to no connection to gambling. A prominent example is the promotion of sports news websites by offshore betting operators like Dafabet and 1xbet. These operators have launched platforms such as ‘Dafanews’ and ‘1xBat,’ which bear a deceptive resemblance to their betting websites. Although these platforms superficially provide sports news, the branding and logos are so identical to those of the betting sites that the connection is unmistakable to consumers. This approach effectively builds brand recognition and loyalty for the gambling site under the guise of promoting a legitimate service. The involvement of celebrities as brand ambassadors for these surrogate products is also regulated by the ASCI code. However, the regulations are merely suggestive in nature and create no real onus on the advertiser other than mere due diligence. Such endorsements not only lend credibility to these surrogate platforms but also enhance their visibility, subtly reinforcing the association with the gambling sites they represent.

In response to these practices, the Central Consumer Protection Authority (CCPA) updated its Guidelines in June 2022, aiming to restrict surrogate advertising more effectively. However, the CCPA Guidelines, although prohibiting both direct and indirect advertisements, fall short of addressing the concept of brand extension, a strategy that has become crucial for many advertisers to bypass advertising bans.

Brand extension involves using a brand name associated with a prohibited product, such as an online gambling site, to advertise a different, unrelated product. The Guidelines contain a loophole that allows this practice: they specify that using a brand name also associated with restricted goods or services will not be considered surrogate advertising if the advertisement itself is not otherwise objectionable. This provision enables gambling platforms to use their brand name to promote other ventures, such as clothing lines or airlines, thereby maintaining brand visibility without technically violating the guidelines. Dream11, a fantasy sports platform, provides a clear example of this strategy in action. By marketing itself as a skill-based gaming platform rather than a gambling site, Dream11 operates in a grey area that distinguishes it from traditional gambling websites. Dream11’s sponsorship of the Indian cricket team has significantly raised its brand profile, featuring its logo on team jerseys and in cricket stadiums, ensuring continuous brand exposure.

The Nexus to Illegal Platforms:

While larger players can afford surrogate advertising and brand extensions, this legislative gap is generally exploited by smaller gambling operators who find more affordable and less regulated avenues for advertising on illicit platforms. India’s staggering position as the third-largest contributor to global content piracy, with over 7 billion visits to torrent sites in 2022 alone, presents a fertile ground for such operators. The utilization of illicit platforms for gambling advertisements is facilitated by the largely unregulated nature of digital ad networks, including major players like Google Ads and smaller, more niche networks such as TrafficJunky. These networks operate on a model that relies heavily on self-regulation, allowing advertisers to self-categorize their content. The situation is further complicated by the safe harbour provisions under the IT Act, which offer protection to electronic intermediaries such as ISPs and search engines, thereby limiting their liability for the content disseminated through their platforms.

The implications of this advertising strategy are particularly concerning when looking at the demographics of the platforms involved. Pornographic websites, despite being subject to age restrictions, are notoriously easy for minors to access in India. The presence of gambling advertisements on such platforms exposes a vulnerable population to content that is not only inappropriate but also potentially addictive. Furthermore, the sexualized nature of these advertisements, a tactic deliberately employed to resonate with the predominantly male audience of pornographic sites, is ethically and morally problematic. Intertwining gambling with sexual imagery aims to exploit the psychological vulnerabilities of individuals already engaged in risky online behaviour. Compounding these issues is the widespread use of cookie-based targeting by ad networks. This enables ads to be tailored to individual users based on their browsing history, effectively placing the content out of the control of the websites themselves. Consequently, gambling advertisements can be displayed across a wide array of platforms, including those hosting illegal content, without the explicit knowledge or consent of the site operators.

Comparative Legislation

With India’s problems in properly regulating advertisements in the gambling industry, an examination of how the problem has been tackled by foreign jurisdictions can help lay out a pattern for the way ahead. In this regard, the European nations are leading the charge, with nations like Italy, Spain and the Netherlands imposing severe restrictions on the placement of gambling and related ads.

In 2018, Italy introduced a decree, namely the Decreto Dignitá or the Dignity Decree. This decree provided a blanket ban on all forms of gambling advertisements, whether they were physical or online. This had been introduced in the wake of the Italian government’s recognition of the gambling problem persisting in the society, with reports estimating that almost 3 per cent of the population was suffering from a gambling disorder. Along with this ban, Italy introduced a strict regulatory regime to prevent these advertisements from reaching their cyberspace, which allowed them to fine any private broadcasters, whether domestic or foreign, for hosting gambling advertisements in their cyberspace. Moreover, it has also given the Italian authorities the power to block any sites that hold advertisements for gambling, with the Italian Customs and Monopolies authorities (ADM) blocking more than 9800 sites just in 2023 after the ban came into effect. The Italian model of gambling advertisement regulation has been largely successful in restricting them. However, it has led to another problem, the growth of the unlicensed gambling market, with the European Gaming Board Association (EGBA) presenting concern over reports estimating that almost 18.5 billion Euros are being bet annually on these unlicensed sites. This has happened because licensed sites are unable to advertise, and people are unable to substantiate the difference between a licensed site and an unlicensed one, leading to them engaging in the unlicensed ones as well.

Another country that has tried to deal with the problem of unregulated gambling advertisements is Indonesia. Indonesia has a massive gambling economy, despite it being banned across the country, amounting to almost 20 billion USD. As a result, in the last few years, the Indonesian government has clamped down heavily on the gambling industry, with the Communication and Information Technology Ministry (Kominfo) employing Artificial Intelligence and web-crawler technologies to find sites that are promoting online gambling or have online gambling and shutting them down in the Indonesian cyberspace. Moreover, as a part of the clampdown, they have introduced regulations that allow them to remove the Internet Service Provider licenses (ISP) of the platforms that continue to host these advertisements. This has been largely successful as well, with the Indonesian authorities being able to remove access to almost 2 million sites that possess online gambling material.

The Way Forward

The existing regulatory framework for gambling advertisements in India requires a comprehensive overhaul to address the myriad challenges posed by the digital age and the evolving strategies of gambling operators. Drawing inspiration from international best practices while tailoring solutions to India’s unique legal and social context, this paper proposes a multi-faceted approach to close the current legislative gaps and strengthen the regulatory regime.

At the forefront of this reform should be the enactment of a unified, national-level Gambling and Betting Regulation Act. This legislation would serve to harmonize the patchwork of existing laws, clearly delineating the boundaries between gambling, betting, and skill-based gaming. Such clarity is essential for effective regulation and would provide a solid foundation for addressing the nuances of digital platforms and gamified betting services. The Act should also establish a central regulatory body, akin to the UK Gambling Commission, vested with the authority to oversee all gambling-related activities and advertisements across India.

A crucial component of this new regulatory framework should be the implementation of a stringent licensing system for gambling operators, including those based offshore. This system would mandate adherence to strict advertising guidelines as a prerequisite for obtaining and maintaining a license. Licensed operators could be granted limited advertising rights under carefully controlled conditions, while unlicensed entities would face severe penalties for any form of promotion or advertisement.

In order to bolster digital enforcement capabilities, it is imperative to equip CERT-In and other relevant authorities with advanced technological tools. Drawing inspiration from Indonesia’s use of AI and web-crawler technologies, these enhanced capabilities would enable proactive identification and swift removal of unauthorized gambling advertisements from Indian cyberspace. Addressing the pervasive issues of surrogate advertising and brand extension necessitates closing existing loopholes in the CCPA Guidelines. The regulations should explicitly prohibit surrogate advertising and impose stringent limitations on brand extension activities for gambling-related companies. Any proposed brand extension should be subject to a rigorous approval process to ensure genuine separation from gambling operations.

For India, the risk of unintended consequences, similar to the afore-mentioned, is a real concern. If the regulatory regime becomes too restrictive, it could push both consumers and operators towards illegal avenues, undermining the very purpose of the legislation. The black market is not only harder to monitor but also tends to be more predatory, as it operates without any oversight or consumer protection mechanisms. An over-regulatory approach serves the risk of giving impetus to black market gambling operations, as can be seen in Italy. A completely regulated ban on gambling advertisements in Italy has led to a significant growth of these operations, which are much harder to control. A balanced approach towards the regulation of these advertisements, along with an indication of which sites are licensed and which are unlicensed to the consumers of gambling, can help avoid the growth of such operations and prevent people from gambling on such sites.

Considering the present legal framework surrounding advertising regulations and their consequential effects, it is evident that deferring action is not an option, and this paper is but an attempt to advocate for positive action.

(This post has been authored by Abhishek Sanjay and Tanish Duggal, second-year law students at NALSAR University of Law, Hyderabad.)

CITE AS: Abhishek Sanjay and Tanish Duggal,  ‘Advertising Games of Chance: Legislative Gaps in India’s Gambling Laws’ (The Contemporary Law Forum, 2 February 2025)  <https://tclf.in/2025/02/02/advertising-games-of-chance-legislative-gaps-in-indias-gambling-laws/>date of access

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