Mondaq
Since time immemorial, businesses have promoted their products and services through advertisements as a go-to, to drive sales.
Since time immemorial, businesses have promoted their products and services through advertisements as a go-to, to drive sales. Whether such advertisements have been on a standalone basis, showcasing only the products or services (as seen in the early days) or by means of engaging an influential celebrity to endorse such products or services (as seen more recently), the necessity of advertisements has never been questioned. Nevertheless, businesses have had to set aside an exorbitant budget, not only towards producing advertisements but also for onboarding an influential celebrity to endorse their businesses.
However, with the advent of social media, advertisement budgets have significantly reduced. This has allowed businesses to allocate their advertisement budget not only on the quality of such advertisements, but also towards expanding their rolodex of endorsers, to also include social media influencers who have build in communities, hanging on their every word.
With the transformation of social media platforms as powerful marketing tools, having the ability to rapidly disseminate information to a large section of audiences, the rise in online gambling companies opting to utilize these platforms for promotions has been significant. This revolution of online advertising has, in its wake, also given rise to a plethora of legal challenges particularly involving regulatory compliances for promoting products and services online, and even more so for products and service which are already heavily regulated in India.
A great example for the same, would be the gaming sector, especially when ‘gambling’ is involved. In the state of Tamil Nadu, promotion of gambling through online media has recently attracted a great deal of attention from the Tamil Nadu Online Gaming Authority (TNOGA). Through this article, we aim to explore the implications and extent of regulation of such online promotion of ‘gambling” in the state of Tamil Nadu, and potential legal consequences for non-compliance of such regulations. Online gaming in India is primarily governed at the state level, with each state having the authority to formulate its own laws concerning gaming activities. In the state of Tamil Nadu, the Tamil Nadu Gaming Act, 1930, along with subsequent amendments, governs gaming laws. The Act prohibits most forms of gambling, with certain exceptions such as games of skill. In 2021, the state government recognized the need to regulate online gaming and established the TNOGA, tasked with overseeing online gambling and ensuring compliance with local laws and have taken a firm stance against online gambling and its promotion, particularly following incidents related to gambling addiction and associated social issues.
One of the primary concerns highlighted regarding gambling promotions on social media include its potential to act as misleading advertising. Under the Act, any advertisement that misrepresents the nature of gambling or its risks can be deemed unlawful. A prevalent practice that has been observed to be followed by promoters of online gambling, is the downplaying of the addictive nature of gambling or exaggerating the chances of winning, especially when the chances of winning have been endorsed by one’s favourite social media influencer. These practices often tend to mislead consumers into suffering heavy monetary losses.
Social media influencers have been coyly endorsing platforms for online games of rummy, poker and other kinds of betting and gambling amidst their usual vlogs; enticing followers with a promise to win cash prizes of up to Rs. 10 lakh every day, in exchange of a deposit for meagre amounts of Rs. 100 to 1,000 per hour. It was in furtherance of providing protection against the endorsement by such social media influencers, that TNOGA has recently initiated legal action against several social media influencers. A show cause notice was initially issued against them before a legal action was brought before Metropolitan Magistrate Court, Saidapet. Amongst the concerns raised, TNOGA also cited that young followers of these influencers are a vulnerable group likely to become potential victims to gambling addictions. If found guilty, these social media influencers are expected to face legal ramifications which could include fines ranging between Rs. 5 – 10 Lakhs or a prison term of up to 3 years or both.
In addition to implicating social media influencers, TNOGA has also actively pursued regulatory actions against companies that violate local laws. While TNOGA has taken action by issuing warnings and slapping fines first-time offenders, for repeated offenders, TNOGA has also taken measures as extreme as suspending operations of these companies or initiating civil or criminal charges against them. Further, TNOGA has also actively perused the regulations of various countries around the world to recommend guidelines that should be implemented for the online gaming sector. Some of the suggestions put forth by TNOGA include restricting the hours of game play, or deposits made by a user to play online gambling games.
The promotion of gambling through social media in Tamil Nadu presents a complex legal landscape characterized by stringent regulations and the potential for significant legal repercussions. As the state continues to grapple with the implications of online gambling, businesses, celebrities and social media influencers must tread through murky waters carefully. Compliance with the Act is not merely advisable, but also essential for a sustainable operation of gambling-related enterprises in the digital age. By prioritizing responsible marketing practices and adhering to legal standards, businesses, celebrities and social media influencers can protect themselves from legal actions while contributing to a safer gambling ecosystem. It however remains to be seen if the rest of country follows Tamil Nadu, in their fight against online gambling and if so, how impactful would such stringent regulations be in the present circumstances.
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