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Advertisements Of Online Betting Platforms – The Noose Tightens – Gaming

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Introduction

In line with the government’s continued efforts to curb the
broadcasting and publishing of advertisements relating to online
betting platforms, the Ministry of Information and Broadcasting
(“I&B Ministry“), on 3 October 2022,
issued two advisories1
(“Advisories“) to (i) publishers of news
and current affairs content on digital media and publishers of
online curated content2, and (ii) private satellite
television channels3 (“Media
Platforms
“). The Advisories strongly recommend that
Media Platforms should refrain from broadcasting advertisements of
online offshore betting platforms and / or their surrogate news
websites or any such product / service depicting such online
betting platforms in a surrogate manner.

The Advisories brought forth are in continuation to the previous
advisory issued by the I&B Ministry on 13 June 2022
(“Previous Advisory“) in the same
regard, after the industry witnessed a sharp increase in the number
of advertisements broadcasted by online betting websites /
platforms on print, electronic, social and online media.

Recent developments

The Previous Advisory was issued to print, electronic and
digital media directing them to refrain from advertising and
promoting online betting platforms in India or towards the Indian
audience, both online and in print.4 The Previous
Advisory recognized the potential detrimental effects that betting
may have on the youth of India, with the I&B Ministry
emphasizing on the need for such advisory in the larger interest of
the public. Further, the advisory sought to ensure that (a) Indian
print and digital advertisers do not advertise online betting
platforms; and (b) the Indian audience is not exposed to any
advertisements promoting online betting platforms.5

In the last few years, the government has incorporated various
provisions under the newly introduced legislations and guidelines
to address the rising concern of broadcasting advertisements of
online betting and gambling platforms. On 25 February 2021, the
Ministry of Electronics and Information Technology published the
Information Technology (Intermediary Guidelines and Digital Media
Ethics Code) Rules 2021 which requires a social media intermediary
(i.e., an intermediary which enables online interaction between
users and allows them to create, upload, or share information using
its service) to have appropriate regulations in place to ensure
that users of such intermediary do not create, upload, or share any
such content or information which promotes gambling.6 On
10 June 2022, the Ministry of Consumer Affairs, Food and Public
Distribution issued the Guidelines for Prevention of Misleading
Advertisements and Endorsements for Misleading Advertisements 2022
(“Misleading Advertisements Guidelines“)
which prohibits all forms of surrogate advertising and specifically
states that “An advertisement shall be considered to be a
surrogate advertisement or indirect advertisement, if (a) such
advertisement indicates or suggests directly or indirectly to
consumers that it is an advertisement for the goods, product or
service whose advertising is prohibited or restricted by law; or
(b) such advertisement uses any brand name, logo, colour, layout
and presentation associated with such goods, product or services
whose advertisement is prohibited or
restricted.
7

The issue at hand

In an attempt to circumvent the restrictions imposed by the
government in relation to broadcasting or publishing of
advertisements of online betting platforms, few betting platforms
have undertaken the provision of certain ancillary / alternate
services such as operating 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 for advertising their ancillary / alternate
service platforms and by doing so the companies have thereby
continued to gain visibility for their online betting platforms as
well, courtesy the identical names and logos associated with the
ancillary / alternate service platforms thereby circumventing
extant advertising regulations in the country. To give a few
examples of this, the government has, in the Advisories, cited
various exhibits of such advertising of online betting platforms
undertaken by Media Platforms including advertisements of
‘1XBet’ on OTT Platforms, ‘fairplay news’ on
‘Star Sports’ channels, ‘betway.net’ on
‘Sony’ channels, Pari match, an online sports betting
company, advertises itself through the use of an alternate news
platform called ‘Pari Match news’ on various digital media
platforms, etc.

The Advisories accordingly strongly recommend the Media
Platforms to refrain from broadcasting advertisements of online
betting platforms and / or their surrogate news websites or any
such product / service depicting these platforms in a surrogate
manner. Further, any contravention of the provisions of the
Advisories by any publisher or broadcaster will entail penal
actions under the applicable laws. While the Advisories do not
mention a specific penalty as such, given that the Advisories are
issued under the Information Technology Act, 2000 and the Cable
Television Networks (Regulation) Act, 1995, respectively, the
penalty may include a monetary fine as well as imprisonment in
certain cases, and the officers of the company who were in charge /
responsible at the time when the contravention was committed will
be liable to be proceeded against and punished accordingly.
Further, a contravention may also entail confiscation of
broadcasting / publishing related equipment and / or computer
systems.

Khaitan Comment

The I&B Ministry has repeatedly flagged online betting
platforms as significant financial and socio-economic risks to the
society, especially the youth and the children. Accordingly, in
order to safeguard the consumers from such risks of the online
betting industry, the government is undertaking proactive steps
including introducing new regulations, issuing advisories,
penalising violators etc. While the Advisories are not the first
attempt by the government in its effort to clamp down on
broadcasting advertisements of online betting platforms, it remains
to be seen the manner and effectiveness with which the government
will implement the provisions of these Advisories on an industry
which has only exponentially increased in size with each passing
year.9

One interesting aspect will be to see whether advertisers or
Media Platforms look to interpret the application of the
restrictions in the Advisories to include companies engaged in real
money fantasy sports. The gaming industry in India has grown leaps
and bounds over the past few years and while there remains a debate
on whether the games operated by some of them are games of skill or
games of chance (effectively gambling), should Media Platforms
choose not to air the advertisements of such companies given these
ambiguities, it would come as a blow to such companies and be
detrimental to the growth of such an industry. A number of teams in
franchised or league-based sports in India (e.g., the Indian
Premier League for Cricket, the Pro Kabaddi League for Kabaddi, the
Indian Super League and I-League for Football etc.) are sponsored
by such gaming companies and the Advisories could have an impact on
how such teams or franchises select these companies as their
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 gaming industry.

Footnotes

1. The power to issue advisories for online platforms and
OTT stems from the Information Technology (Intermediary Guidelines
and Digital Media Ethics Code) Rules, 2021 issued under the
Information Technology Act, 2000 whilst for private satellite
television channels, it stems from the Cable Television 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. Advisory on Advertisements of Online Betting
Platforms, https://mib.gov.in/sites/default/files/Advisory%20on%20online%20betting%20advertisements%2013.06.2022%282%29.pdf.

5. Ibid.

6. Rule 3(b)(ii), Information Technology (Intermediary
Guidelines and Digital Media Ethics Code) 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 Prevention of Misleading
Advertisements and Endorsements for Misleading Advertisements 2022,
https://consumeraffairs.nic.in/sites/default/files/file-uploads/latestnews/CCPA%20Notification.pdf.

8. Exhibit II, Advisory on Advertisement of Online
Betting Platforms, 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 Likely to Experience a
Tremendous Growth of USD 167.66 billion by 2029, registering a CAGR
of 10.26 % by Size and Share, Industry Growth, Regional Outlook,
Challenges and Analysis, https://www.globenewswire.com/en/news-release/2022/07/14/2479929/0/en/Sports-Betting-Market-Size-Is-Likely-to-Experience-a-Tremendous-Growth-of-USD-167-66-billion-by-2029-registering-a-CAGR-of-10-26-by-Size-and-Share-Industry-Growth-Regional-Outlook-.html.

The content of this document do not necessarily reflect the
views/position of Khaitan & Co but remain solely those of the
author(s). For any further queries or follow up please contact
Khaitan & Co at legalalerts@khaitanco.com

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