The Nagaland Prohibition of Gambling, Promotion & Regulation of Online Games of Skill Act,2015

THE NAGALAND PROHIBITION OF GAMBLING AND PROMOTION AND 

REGULATION OF ONLINE GAMES OF SKILL ACT,. 2015 

(NAGALAND ACT No.3 OF 2016) 

ieceived the assent of the Governor of Nagaland on 7.4.2016 and published 

in the Nagaland Gazette extraordinary dated 22
nd  
 April 2016 

An 
Act 

to prohibit gambling and regulate and promote online games of skill. 

	

1. 	Short title, extent and commencement:- 

(1) This Act may be called the 'Nagaland Prohibition of Gambling and 

promotion and Regulation of Online Games of Skill Act, 2015. 

(2) It extends to the State of Nagaland. 

(3) It shall come into force with effect on such date as the Government may, 

by notification in the State Gazette, appoint. 

	

2. 	Definitions:-In this Act, unless the context otherwise requires- 

(1) "Gambling" means and includes wagering or betting on games of chance 

but does not include betting or wagering on games of skill. 

Explanation: Once a license has been obtained under this Act, wagering 

or betting on online 'games of skill' or making profit by providing a medium 

for playing 'games of skill' shall not amount to gambling so long as they are 

being provided to players and are being accessed by players operating from 

territories where 'games of skill' are exempted from the ambit of gambling 

(2) "Territory" shall mean any territory in India which "games of skill" are 

permitted, and are recognized as being exempt from the ambit of 

"gambling". 

(3) "Games of skill" shall include all such games where there is 

preponderance of skill over chance, including where the skill relates to 

strategizing the manner of placing wagers or placing bets or where the skill 

lies in team selection or selection of virtual stocks based on analyses or 

297 



where the skill relates to the manner in which the moves are made, whether 

through deployment of physical or mental skill and acumen. 

Explanation: Forthe purposes of this Act:- 

(I) 	All games provided in Schedule A of this Act shall fall under the category of 

"Games of skill" 

(ii)'Games' which have been declared or determined to be 'games of skill' by 

Indian or international courts or other statues, or games where there are 

domestic and international competitions and tournaments, orgarnes which 

can be determined to be 'games of skill' shall further be entitled to be 

included in Schedule A. 

(iii) Games of skill may be (a) Card based and (b) action/ virtual sports/ 

adventure/mystery and (c) calculation/strategy/quiz based 

(4) "Games of chance" shall, subject to the provisions of sub-section (3) above, 

mean all such games where there is a preponderance of chance over skill. 

(5) "Wagering" or "Betting" shall mean the staking of money or virtual 

currency, whether or not it is equivalent to a recognized currency 

(6) "Matchplay shall mean any game of skill played between two or more 

players or between a player and the computer. 

(7) "Peer to Peer Challenge" shall mean a game which is played only between 

two or more players, where I player issues a challenge to another player 

specifically or in general, and another player accepts the challenge on the 

terms proposed. 

(8) "Tournament" shall mean a contest in a game of skill among a. number of 

competitors. 

(9) "Competition" shall mean an event in which individuals or teams contest on 

the basis of their skill and ability. 

(10) Virtual means games played online by r1eans of computer automation and 

exercise of skill. 

(11) Licensing Authority shall mean the Finance Commissioner or any other 

authority designated and empowered on his behalf forthis purpose. 

298 



(12) "Licensee" means a person or company or limited liability company which 

has applied for and obtained a license as provided under the Act. 

(13) "Stake" means Indian Rupee. It shall not mean or include virtual currencies. 

3. So long as the License is acting in accordance with the terms and conditions 

of the license and is not providing the 'games of skill' to players from 

territories they are prohibited or considered to be gambling under any law 

applicable to that territory, the same shall be considered to be a genuine 

business venture not amounting to gambling. 

4. The License Authority shall be entitled to determine and add to the list of 

games which are 'games of skill' based on the aforementioned parameters. 

5. Subject to the provisions of subsection (3) of Section (2), the Finance 

Commissioner or any authority empowered on his behalf may add any game 

to the schedule of 'games of skill' either suo moto or on the representation 

of any party. 

6. The State Government, may, by notification, designate an authority or body 

to monitor and regulate the activities of all licensees to ensure compliance 

with the provisions of this Act, and to settle all disputes arising from the 

activities conducted underthis Act. 

7. Procedural set-up for licensing and terms and conditions:-

A license underthis Act shall be issued in the following manner:- 

Ii 
	

In order of any entity to offer 'games of skill" on their website, mobile 

platform, television or any other online media, and earn revenue from the 

same whether by means of advertising revenue or taking a percentage of 

winnings of gameplay or charging fixed fee for membership or downloading 

the game etc., it shall be necessary for the entity to obtain a valid license as 

prescribed under this Act. 

(2) The license may be issued to any person or entity upon due satisfaction of 

the terms and conditions prescribed in the license, and the satisfaction of 

the issuing authority. 

299 



(3) A license under this Act shall be issued only to a person or entity which is 

incorporated in India, and has a substantial holding and controlling stake in 

India. The executive decision making powers and process would be required 

to be performed from within the territorial boundaries of India and the 

technology support provision including hosting and management of 

website, placement of servers etc. shall remain in India. 

(4) A license under this Act shall be issued only to a 

person/Company/entity/firm which has no interest in any online or off line 

gambling activities, in India or abroad. 

(5) The State Government may, by notification prescribe the manner and 

format for the applications for license, including the terms and conditions of 

the license maybe issued under this Act. 

(6) The State Government may, if so required, frame rules for proper 

implementation of the Act. Such rules may also determined the terms and 

conditions underwhich a license may be issued to an applicant. 

8. 	Procedures for termination of license:- 

(1) In case of breach of the terms and conditions of the license, the Licensing 

authority shall issue a notice to show cause as to why the license should not 

be cancelled, and the license holder shall be granted the right to make a 

written as well as oral representation. 

Provided that the violation of the license terms may be compounded if the 

breach is remedied within 30 days of the breach having been established to 

the satisfaction of the Licensing Authority. 

(2) If there is any delay in payment of license fee, the said breach may be 

compounded by payment of penalty calculated @ 12% perannum. 

9. 	Refusal to issue license:- 
(1) 	The licensing Authority shall be required to decide on the issue of issue of 

license within 6 months from the date an application has been received 

applying for the same. The licensing authority shall be entitled to seek 

details to satisfy itself of the antecedents and eligibility criteria satisfaction 

of the person, individual orfirm applyingforthe same. 

300 



(2) Any decision of the Licensing Authority to refuse issue of license to any 

applicant for any game shall be communicated through a speaking order 

stating the reasons thereof forthe refusal. 

10 	The State Government may make amendments to the Rules byway of issue 

of notification, including notifying furthergames of skill. 

11. Provisions relating to operations of companies holding a valid license 

under this Act in any State or Union Territory:- 

(1) If a State Government is of the opinion that the license is operating in its 

State in violation of the provisions of the Act and these rules, or in violation 

of the provisions of its local statutes, it may immediately bring the violation 

to the notice of the Licensing Authority of the State of Nagaland along with 

the details of such violations or irregularities noticed. 

(2) The licensing Authority of the State of Nagaland shall send a suitable 

response on the issues raised by the State, Government under sub-rule 

(1); and take steps to resolve the issues raised. 

12. 	(1) In case any person or entity or license holder is found to be engaging in 

'games of chance' or gambling activitie5, he or 5uch entity shall be liable to a 

fine of Rs. 20 Iakhs in the first instance and if not remedied thereafter, to a 

simple imprisonment of 6 months. It is clarified that playing of 'games of 

skill' for stakes as perthe license would not amount to gambling. 

(2) 	In case any party is found to have made a deliberate mis-declaration to the 

Licensing Authority in order to obtain a license, the person(s) in charge of 

the said company or the individual concerned shall be liable to be convicted 

and sentenced fora period of uptosix(6) months or fine of upto Rs.20lakhs. 

(3) Any person or entity found guilty of violation of the above provisions shall 

not be eligible for renewal of license and shall be further liable for 

immediate termination of the existing license. 

(4) All offences under this Act shall constitute an offence as per the provisions of 

the Code of Criminal Procedure 1973 (As amended). 

301 



SCHEDULE-A 

Chess 

Sudoku 

Qu I zs 

Binary Options 

Bridge 

Poker 

Rummy 

Nap 

Spades 

Auction 

Solitaire 

Virtual Golf 

Virtual racing games including virtual horse racing, virtual car racing etc. 

Virtual Sports including virtual Soccer, virtual Cricket, virtual Archery, virtual 

snooker/bridge/pool 

Virtual Fighting 

Virtue wrestling 

Virtue boxing 

Virtue combat games 

Virtual adventures games 

Virtual mystery and detective games 

Virtual stock/monopoly games 

Virtual team selection games 

Virtual sport fantasy league games. 

x x 

302