INDIAN GAMING STATESIDE
Supreme Court upholds state power to tax lotteries from other states
In a signifi cant ruling, the Supreme Court bench comprising Justices MR Shah and BV Nagarathna upheld the State legislatures competence to levy tax on the lotteries organized by other states and allowed the appeals fi led by the States of Karnataka and Kerala challenging the judgments of Karnataka and Kerala High Courts. The respective High Courts held that the states lacked the legislative competence to levy tax on the lotteries organized by other states like Nagaland, Meghalaya and Sikkim. The Karnataka High Court in 2010 had
struck down the Karnataka Tax on Lotteries Act, 2004 and held that the State lacked the legislative competence to enact the law. Similarly, in 2020, the Kerala High Court quashed the Kerala Tax on Paper Lotteries, Act, 2005. Both the states were directed to refund the tax collected under these legislations. Aggrieved by these decisions, the states have appealed to the Supreme Court. “The power to tax is on all activities which
are in the nature of ‘betting and gambling,’ including lotteries. Since, there is no dispute
that lotteries, irrespective of whether it is conducted or organised by the Government of India or the Government of State or is authorised by the State or conducted by an agency or instrumentality of State government or Central government or any private player, is ‘betting and gambling’, State legislatures have the power to tax lotteries under Entry 62 of the State List,” Justice Nagarathna, who authored the 122-page judgment, held. It may be noted the case relates to pre-GST era. The case pertains to pre-GST era where
Entry-62 of the State List permitted states to impose tax on betting and gambling (which includes lottery). As part of GST reforms, the Entry 62 has been amended in 2016 to limit the taxing power to taxes on entertainments and amusements to the extent levied and collected by a Panchayat or a Municipality or a Regional Council or a District Council. The Court held that entries in the different Lists should be read together without giving a narrow meaning to any of them. “Even where an Entry is worded in wide terms, it cannot be so interpreted as to negate or override another Entry or make
another Entry meaningless.” The Court held that where one entry is made ‘subject to’ another Entry, all that it means is that out of the scope of the former entry, a fi eld of legislation covered by the latter entry has been reserved to be specially dealt with by the appropriate Legislature. “We fi nd that Division Benches of the High
Courts of Kerala and Karnataka were not right in holding that the respective State legislatures had no legislative competence to impose tax on the lotteries conducted by other States in their State,” Justice Nagarathna noted. “We also hold that lottery schemes by the
Government of other States are organised/ conducted in the State of Karnataka or Kerala and there are express provisions under the impugned Acts for registration of the agents or promoters of the Governments of respective States for conducting the lottery schemes in the State of Karnataka and the State of Kerala. This itself indicates suffi cient territorial nexus between the respondents–States who are organising the lottery and the States of Karnataka and Kerala.” the judgment said.
100+ complaints against online gaming ads since January The questions by Premjibhai are related to
Over 100 complaints against advertisements related to “online real money gaming” have been processed by the Advertising Standards Council of India since January last year, the government told the Lok Sabha on Tuesday. In a written reply, Minister of Information and Broadcasting Anurag Thakur said the ministry has issued an advisory to private satellite TV channels to comply with the guidelines of ASCI on advertisements relating to online gaming to protect consumers and inform them regarding the fi nancial risks and other factors involved. The minister gave this response while responding to queries from Premjibhai Solanki who is a BJP MP from Gujarat. “The ASCI is a self regulating body which
examines complaints relating to gaming advertisements of offshore gaming companies in the context of contravention of the ASCI code or guidelines on online gaming for real money winnings,” Thakur said in a written response. “From January 2021 to January 2022, ASCI has processed 117 complaints related to online real money gaming,” he said. The minister said that the Central Consumer Protection Authority can issue directions in this regard.
misleading advertisements by the illegal offshore betting and gambling websites on Indian TV and Over The Top (OTT) channels. The MP sought details from the Government on the steps taken to stop such advertisements and whether the Advertising Standard Council of India (ASCI) is empowered to take action against such advertisement violations. The guidelines issued by the Advertising
Standards Council of India (ASCI) that came into effect on December 15, 2020, require real money gaming advertisements to not be aimed at minors, not present gaming as a possible source of livelihood or link it to success. In addition, the guidelines also require all
advertisements to carry a disclaimer regarding the risk of financial loss and the addictive nature of such games in print and audio/visual formats: This game involves an element of financial risk and may be addictive. Please play responsibly and at your own risk. Earlier in February 2021, it was that ASCI
processed 81 complaints against advertisements of various online gaming
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platforms after releasing guidelines related to real-money gaming. In terms of platforms, a majority of the complaints received were regarding ads on Instagram (39) and YouTube (37). The maximum number of complaints were fi led against online cricket (55) and rummy (15).
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