Advertisements from online betting platforms – The noose is tightening – Gaming

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Introduction

In line with the government’s ongoing efforts to curb the dissemination and publication of advertisements relating to online betting platforms, the Ministry of Information and Broadcasting (“I&B Ministry“), on October 3, 2022, issued two notices1(“Notice“) to (i) publishers of news and current affairs content on digital media and publishers of selected content online2and (ii) private satellite television channels3 (“Media platforms“). The notices urge media platforms to refrain from running advertisements of online offshore betting platforms and/or their surrogate news websites or any products/services depicting such platforms. -forms of online betting in a substitutive way.

The notices issued follow the previous notice issued by the I&B Department on June 13, 2022 (“Previous review“) in the same vein, after the industry saw a surge in the number of advertisements served by online betting sites/platforms across print, electronic, social and online media.

RECENT DEVELOPMENTS

The previous notice was issued to print, electronic and digital media advising them to refrain from advertising and promoting online betting platforms in India or to the Indian public, both online and in print .4 The previous notice acknowledged the potential adverse effects betting could have on Indian youth, with the I&B ministry stressing the need for such a notice in the overall public interest. Further, the notice sought to ensure that (a) Indian print and digital advertisers do not advertise online betting platforms; and (b) the Indian public is not exposed to any advertisements promoting online betting platforms.5

Over the past few years, the government has incorporated various provisions as part of newly introduced legislations and guidelines to address the growing concern over the showing of advertisements on online betting and gaming platforms. On February 25, 2021, the Ministry of Electronics and Information Technology published the Information Technology Rules (Guidelines for Intermediaries and Digital Media Code of Ethics) 2021 which require an intermediary social media provider (i.e. an intermediary that enables online interaction between users and allows them to create, upload or share information using its service) in order to put in place appropriate regulations for ensure that users of this intermediary do not create, upload or share any content or information promoting gambling.6 On June 10, 2022, the Department of Consumer Food and Retail released the Guidelines for the Prevention of Misleading Ads and Approvals for Misleading Ads 2022 (“Misleading Advertising Guidelines“) which prohibits any form of substitute advertising and specifically states that “An advertisement is considered a substitute advertisement or indirect advertisement if (a) such advertisement directly or indirectly states or suggests to consumers that it is an advertisement for goods, products or services the advertising of which is prohibited or restricted by law; or (b) such advertisement uses a brand name, logo, color, layout and presentation associated with such goods, products or services the advertising of which is prohibited or restricted.seven

The problem at hand

In an attempt to circumvent the restrictions imposed by the government on the dissemination or publication of advertisements of online betting platforms, few betting platforms have undertaken the provision of certain ancillary / alternative services such as the operation of blogs, news content platforms, etc., with the same brand name and logo as their corresponding online betting platforms.8 Online betting companies have collaborated with Media Platforms to advertise their ancillary/alternative service platforms and in doing so the companies have continued to gain visibility for their online betting platforms as well, through names and identical logos associated with ancillary/alternative service platforms. circumventing the advertising regulations in force in the country. To give some examples of this, the government has, in the notices, cited various exposures of such online betting platform advertisements undertaken by Media Platforms, including advertisements of “1XBet” on OTT platforms, “ fairplay news” on the “Star Sports” channels. , “betway.net” on “Sony” channels, Pari match, an online sports betting company, is making a name for itself using an alternative news platform called “Pari Match news” on various media platforms digital, etc.

The notices therefore strongly recommend that media platforms refrain from running advertisements from online betting platforms and/or their surrogate news websites or any products/services representing these platforms in a surrogate manner. In addition, any violation of the provisions of the Notices by any publisher or broadcaster will result in criminal prosecution under applicable laws. Although the notices do not mention any specific penalty as such, as the notices are issued under the Information Technology Act 2000 and the Cable Television Networks Act 1995 ( regulations), the penalty may include a fine as well as imprisonment. in some cases, and the officers of the company who were in charge/responsible for it at the time the contravention was committed will be liable to be prosecuted and punished accordingly. In addition, a violation may also result in the confiscation of broadcast/editing-related computer equipment and/or systems.

Khaitan’s comment

The I&B Ministry has repeatedly pointed out that online betting platforms pose significant financial and socio-economic risks to society, especially young people and children. Accordingly, in order to protect consumers from such risks of the online betting industry, the government is taking proactive measures, including introducing new regulations, issuing notices, penalizing violators, etc. Although the notices are not the government’s first attempt in its efforts to clamp down on the spread of advertisements from online betting platforms, it remains to be seen how and how effectively the government will implement the provisions of these notices. on an industry that has only grown exponentially year after year.9

An interesting aspect will be whether advertisers or media platforms seek to interpret the application of restrictions in reviews to include companies engaged in real-money fantasy sports. The gaming industry in India has grown by leaps and bounds over the past few years and although there remains a debate whether the games operated by some of them are games of skill or games of chance (actually, gambling), should media platforms choose not to run advertisements from such companies given these ambiguities, it would be a blow to these companies and harm the growth of such an industry. A number of franchised or league-based sports teams in India (e.g. Indian Premier League for cricket, Pro Kabaddi League for Kabaddi, Indian Super League and I-League for football, etc. ) are sponsored by these game companies and the reviews could impact how these teams or franchises select these companies as sponsors. Several industry stakeholders have called on the government to reconsider its restrictions on the online betting industry by introducing a central and uniform set of regulations to ensure greater transparency within the gambling industry.

Footnotes

1. Power to issue notices for online and OTT platforms derives from the Information Technology Rules 2021 (Guidelines for Intermediaries and Digital Media Code of Ethics) issued under the Act of 2000 on Information Technology, while for private satellite TV channels it derives from the Cable TV Act. Networks (Regulation) Act, 1995.

2. Ministry of Information and Broadcasting, Government of India, https://mib.gov.in/sites/default/files/Advisory%20to%20Digital%20News%20Publishers%20and%20OTT%20Platforms%2003.10.2022 %20% 281%29.pdf.

3. Ministry of Information and Broadcasting, Government of India, https://mib.gov.in/sites/default/files/Advisory%20to%20Private%20Satellite%20TV%20Channels%2003.10.2022.pdf.

4. Online Betting Platforms Advertisements Notice, https://mib.gov.in/sites/default/files/Advisory%20on%20online%20betting%20advertisements%2013.06.2022%282%29.pdf .

5. Same.

6. Rule 3(b)(ii), Information Technology (Intermediary Guidelines and Digital Media Code of Ethics) Rules 2021, https://mib.gov.in/sites/default/ files/IT%28Intermediary%20Guidelines%20and%20Digital%20Media%20Ethics%20Code%29%20Rules%2C%202021%20English.pdf.

7. Paragraph 6, Guidelines for the Prevention of Misleading Ads and Approvals for Misleading Ads 2022, https://consumeraffairs.nic.in/sites/default/files/file-uploads/latestnews/CCPA%20Notification.pdf.

8. Exhibit II, Online Betting Platforms Advertising Notice, https://mib.gov.in/sites/default/files/Advisory%20to%20Digital%20News%20Publishers%20and%20OTT%20Platforms%2003.10. 2022%20%281%29.pdf.

9. Sports Betting Market Size is Expected to Grow at a Phenomenal Growth of USD 167.66 Billion by 2029, Registering a CAGR of 10.26% by Size & Share, Industry Growth, Regional Outlook, Challenges & Analysis , https://www.globenewswire.com/fr/communique-de-presse/2022/07/14/2479929/0/fr/La-taille-du-marche-des-paris-sportifs-est-susceptible-de -expand-growth-of-167-66-billion-USD-by-2029-recording-a-CAGR-of-10-26-by-size-and-share-in-the-growth -industry-.html.

The contents of this document do not necessarily reflect the views/positions of Khaitan & Co but remain solely those of the authors. For any other questions or follow-up, please contact Khaitan & Co at [email protected]

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