Sikkim Online Gaming (Regulation) Act, 2008, SCC, 2017

SCC Online Web Edition, © 2023 EBC Publishing Pvt. Ltd.
Page 1 Wednesday, September 06, 2023

Printed For: Sanskar Barekar, Maharashtra National Law University
SCC Online Web Edition: http://www.scconline.com
© 2023 EBC Publishing Pvt. Ltd., Lucknow.
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The
Sikkim Online Gaming (Regulation) Act, 20081
(Online Gaming (Regulation) Act, 2008)
[Sikkim Act 23 of 2008 as amended up to Sikkim Act 16 of 2017]
[28th June, 2008]
CONTENTS
1. Short title, extent and commencement
2. Definitions
3. Licencing of Online Gaming and Sports Gaming and exemption under law
4. Application for Licence for Online Gaming and grant or refusal of such Licence
5. Duration of Licence
6. Licence Fees
7. Variation and Transfer of Licence
8. Assignment of Licence
9. Renewal/refusal to renew
10. Marketing and promotion
11. Power to suspend or cancel licenses
12. Penalty for contravention of conditions of licenses
12-A. Appeal against order of the Authorized Officer
12-B. Authority for overseeing online gaming etc
13. Licence holder to keep accounts and submit the same to government or
authorized officer
14. Penalty for failure to keep and submit accounts
15. Best Judgment assessment in certain cases
16. Penalty for contravention of conditions of licence or of rules by persons

playing Online Games and exhibition of conditions of licence by licensee
17. Offences by Companies
18. Compounding of offences
19. Power to require production of accounts or to inspect accounts

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20. Power of entry and search
21. Offences to be cognizable and bailable
22. Protection of action taken in good faith
23. Power to make rules
24. Rules made shall be laid before each house of the State Legislature
———
Sikkim Online Gaming (Regulation) Act, 2008

[Sikkim Act 23 of 2008 as amended up to Sikkim Act 16 of [28th June, 2008]
2017]
An Act to provide for the control and regulation of online gaming through electronic or
non-electronic formats, and to impose 2[a fee] on such games, in the State of Sikkim.
Be it enacted by the Legislature of Sikkim in the Fifty-ninth Year of the Republic of
India as follows:—
1. Short title, extent and commencement.—(1) This Act may be called the Sikkim
Online Gaming (Regulation) Act, 2008.
(2) It extends to the whole of Sikkim.
(3) It shall come into force on such date as the State Government may, by
notification in the Official Gazette appoint.
2. Definitions.—In this Act, unless the context otherwise requires:—
(a) “Act” means the Sikkim Online Gaming (Regulation) Act, 2008;
(b) “Appellate Authority” means the State Government or such authority as may
be appointed by the State Government;
3 [(bb) “Authority” means and includes such body consisting of such officials both
technical as well as administrative and legal as may be constituted by the

State Government.]
(c) “Authorized Officer” means any person or persons appointed by the State
Government for the purpose of the Act;
(d) “Online Games” means all or any games of chance or a combination of skill
and chance, including but not limited to Poker, Roulette, blackjack or any
game, played with cards, dice or by means of any machine or instrument for
money or money's worth, as may be prescribed from time to time;
(e) “Company” means a body corporate, and includes firm or other association of
individuals duly constituted and registered under the provisions of the
Registration of Companies Act Sikkim 1961 4 [or the Companies Act, 1956 (Act
1 of 1956), as the case may be];
(f) “Government” means the State Government of Sikkim;
(g) “Gross Gaming Yield” means the total amount of all bets or stakes made, and
the price of all chances sold, less the value of all winnings and prizes due, in
the course of the Online Gaming 5 [or Sports Gaming] during the period in
question;
(h) “Instruments of Gaming” means and includes any article used or intended to
be used as a subject, and accessory or means of gaming, any document used
or intended to be used as a register or record or evidence of gaming, the
proceeds of any gaming, and any winnings or prizes in money or otherwise
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distributed or intended to be distributed in respect of any gaming;

(i) “Licence” means a licence granted by the State Government under the
provisions of the Act for the purpose of running Online Games and Sports
Games, including its organization, management or promotion and negotiation
or receipt of bets;
(j) “Licensee” means any person/company/firm who has been granted a licence
to install and operate Online Games and Sports Games including installing and
maintaining an Online Gaming server;
(k) “Online Gaming” means any gaming, where any player enters or may enter
the game or takes or may take any step in the game or acquire or may acquire
or may acquire a chance in any 6 [on-the gaming or Sport Gaming] (sic
online), by means of a telecommunication device including the negotiating or
receiving of any bet by means of a telecommunication device;
(l) “Online Gaming Server” means any main frame computer or set of computers,
installed or maintained by the Licensee, at a central location in the State that
accepts, processes, stores and validates 7 [an on-line gaming or Sport
Gaming], wager/transaction and otherwise manages, monitors and controls
the entire system;
(m) 8 [“Intranet gaming terminal”] means the internet domain registration 9
[internet gaming terminal] or URI, address of the Licensee through which
Online Gaming is conducted
(n) “Penalty” means a fine imposed by the State Government or any authority for
the breach or contravention of any of the rules made hereunder and on
conviction before a court of competent jurisdiction;
10 [(na) “prescribed” means prescribed by rules made under this Act;]
(o) “Public Place” includes a place to which the public have or any permitted to
have access, including any 11 [Intranet]), whether on payment or otherwise;
12 [(oo) There shall be constituted a Fund to be called a Special Development
Fund where the fees as will be realised under the Act and shall be parked for
its utilization including utilization for the purpose ancillary or related to the
object of realization of the fee.]
(p) “Sports Gaming” means games involving the prediction of the results of
sporting events and placing a bet on the outcome, in part or in whole, of such
sporting event;]
(q) “State” means the State of Sikkim.
3. Licencing of Online Gaming and Sports Gaming and exemption under law.—(1)
All Notifications or Instructions or Orders issued from time to time pertaining to
gaming or wagering or betting shall not apply to Online Games licensed under this Act
or to any Online Game played, organized or the exhibited at such 13 [Internet gaming
terminal].
14
[(2) Online Games and Sports Games shall be played, organized or exhibited to
any person at any person at a gaming parlor through intranet gaming terminals and
which cannot traverse outside the geographical boundaries of State of Sikkim, in
respect of which licence is granted in accordance with the provisions of this Act and
such licence is in force.]
4. Application for Licence for Online Gaming and grant or refusal of such Licence.—
Any person desiring to obtain a licence shall make an application in writing to the
State Government, in such form and manner as may be prescribed On receipt of such
application, the State Government may, after making such inquiry as it considers
necessary, by order in writing, either grant the licence or refuse to grant the licence
without assigning any reasons
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Provided that, where the State Government refuses to grant a licence, it shall put
on its record a brief statement of the reasons for such refusal.
5. Duration of Licence.—(1) A licence, unless it is cancelled or surrendered, shall
remain in force for such period, not exceeding 5 years, as may be specified in it.
The holder of a licence may surrender the licence by notice in writing to the 15
[Finance, Revenue and Expenditure Department].
(2) The cancellation, surrender or expiry of a licence shall not affect any liability for
anything done or omitted to be done before the date on which it ceases to have effect.
6. Licence Fees.—(1) An applicant for the licence shall pay to the State Government
such amount as may be prescribed as application fee for the grant of the licence.
(2) The licensee shall pay to the State Government, at such intervals and in such
manner as prescribed, 16 [a fee], to be known as “online gaming levy”, amounting to
such amount as may be notified from time to time.
(3) The Licensee shall pay to the State Government a renewal fee of such amount
as may be prescribed not later than five years from the date on which the Licence was
specified.
7. Variation and Transfer of Licence.—(1) The State Government may, on
application by the Licensee or of its own motion vary the licence by adding a
prescribed description of online gaming to, or deleting a description of online gaming
from, the descriptions specified in the licence.
(2) The State Government may, on application by the licensee or of its own motion,
vary or cancel any condition specified in the licence.
(3) A variation of a licence or of a condition of a licence, made otherwise than on
application by the Licensee shall not have effect until the expiration of 21 days from
the date on which notice of it is given to the applicant, or where an appeal is made,
until the appeal is abandoned or determined.
(4) The Department may, on an application by the Licensee, transfer the licence to
a person specified in the application.
(5) Such a transfer shall be endorsed on the licence.
8. Assignment of Licence.—The Licence shall not be capable of being assigned in
any form or in any manner.
9. Renewal/refusal to renew.—The State Government may, on application made to
it, renew the licence granted under this Act, on payment of the fee prescribed for
renewal of a license or refuse to renew any such license without assigning any reasons,
but the reasons for such refusal shall be stated on record.
10. Marketing and promotion.—(1) The Licensee shall, with intimation to the State
government, conduct regular promotional activities, including registration bonus,
bonus deposits and free play. For the purpose of calculating Gross Gaming Yield all
such promotional or free bets or stakes shall be excluded.
(2) The Licensee shall, with prior approval of the State government conduct
tournaments and competitions for its players. Such tournament shall be held either
online through the authorized 17 [terminal] or at physical locations anywhere in the
world. The Licensee shall be responsible for obtaining the necessary approvals from
the appropriate authorities at locations where such tournament is to be held.
(3) The Licensee shall, with intimation to the State government, offer its online
games 18 [and Sports Gaming] licensed under this Act, to any other person/company
through the 19 [terminal] and branding of such person/company. For the purposes of
calculating Online Gaming Levy, the Gross Gaming Yield of the Licensee shall include
the Gross Gaming Yield of each such person/company.
11. Power to suspend or cancel licenses.—(1) The State Government may, at any
time, after giving the holder of any license under this Act a reasonable opportunity of
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being heard, suspend or cancel the license on any one or more of the following
grounds, namely:—
(i) That there has been a breach of any of the conditions subject to which the
licence was granted.
(ii) That the holder of the licence has contravened any of the provisions of this
Act or the rules made there under.
(2) Whenever a licence is suspended or cancelled, the State Government shall
record a brief statement of the reasons for such suspension or cancellation and furnish
a copy thereof to the person whose licence has been suspended or cancelled.
12. Penalty for contravention of conditions of licenses.—Without prejudice to the
provisions of the last preceding Section, if the holder of any licence under this Act or
any person acting on his behalf has committed a breach of any of the conditions of the
licence, he shall on conviction, be punished with such a fine as may be prescribed.
20
[12-A. Appeal against order of the Authorized Officer.—(1) Any person aggrieved
by an order of the authorized officer may prefer an appeal to such officer not below the
rank of Secretary to the State Government as the State Government may by
notification appoint under clause (b) of Section 2.
(2) Subject to the provisions of Sections 4 to 9 and 12, an appeal shall lie from
every order of the Authorized Officer under the Act to the Appellate Authority
appointed by the Government under sub-section (1).
(3) Every such appeal shall be preferred within 60 (sixty) days from the date of
communication of the order.
(4) The appellant shall have a right to appear through a counsel and the Authorized
Officer and Department may be represented by such officer or person or a counsel as
the Government may appoint.
(5) On the receipt of any such appeal, the Appellate Authority shall give the
appellant and respondent a reasonable opportunity of being heard and after making
such inquiry as it deems proper, dispose of the appeal for reason to be recorded.
(6) The proceeding before the Appellate Authority shall be completed within four
months of its institution.]
21
[12-B. Authority for overseeing online gaming etc.—The Authority constituted by
the State Government under clause (bb) of Section 2 shall oversee and regulate the
functions of gaming Organizations/Companies involved in on-line games and sports.]
13. Licence holder to keep accounts and submit the same to government or
authorized officer.—The holder of a License under this Act shall keep accounts relating
to online gaming in such manner and submit to the State Government or to an officer
authorized by the State Government in this behalf a statement of accounts in such
form and at such intervals as may be prescribed. Such accounts shall in particular
show the money paid by way of stakes for every online game 22 [and Sports Gaming]
and such other particulars as may be prescribed.
14. Penalty for failure to keep and submit accounts.—If any person liable under the
preceding Section to keep accounts or to submit statement of accounts fails to keep
accounts or to submit statement of accounts as required by that Section or keeps
accounts or submit statements of accounts which are false and which he either knows
or believes to be false or does not believe to be true, he shall, on conviction, be
punished with such fine as may be prescribed.
15. Best Judgment assessment in certain cases.—Where an officer authorized by
the State Government in this behalf is not satisfied about the correctness or
completeness of the accounts kept by the licensee or where the licensee fails to
submit any statement of accounts as required by this Act, the said officer shall after
giving a reasonable opportunity to the licensee to be heard and after taking into
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account all relevant material which he may have gathered, make the assessment of
the levy payable by the licensee to the best of his judgment and call upon the licensee
by order in writing to pay the amount of levy so assessed on or before such date as
may be specified in the order.
16. Penalty for contravention of conditions of licence or of rules by persons playing
Online Games and exhibition of conditions of licence by licensee.—(1) If any person,
other than the Licensee while playing any online game 23 [and Sports Gaming] at the
approved 24 [terminal], licensed under this Act commits a breach of any of the
conditions of the licence as exhibited, or of the rules to be observed in playing such
games, he shall on conviction be punished with fine as may be prescribed.
(2) The Licensee shall exhibit at the approved 25 [terminal], the conditions subject to
which licence is granted to him.
17. Offences by Companies.—Where an offence under this Act has been committed
by a company, every person who at the time the offence was committed was in charge
of and was responsible, to the company for the conduct of the business of the
company, as well as the company shall be deemed to be guilty of the offence and shall
be liable to be proceeded against and punished accordingly;
Provided that nothing contained in this sub-section shall render any such person
liable to any punishment provided in this Act if he proves that the offence was
committed without his knowledge or that he exercised all due diligence to prevent
the commission of such offence.
(2) Notwithstanding anything contained in 26 [sub-section (1)] where an offence
under this Act has been committed with the consent or connivance proved that the
offence has been committed with the consent or connivance of, or is attributable to
any neglect on the part of, any director, manager, secretary or other officer shall also
be deemed to be guilty of that offence and shall be liable to be proceeded against and
punished accordingly.
For this purpose of this Section:
“Director” in relation to a firm means a partner in the firm.
(3) All such offences shall be trialed in the Court of Judicial Magistrate.
18. Compounding of offences.—(1) The State Government or any officer authorized
by it in this behalf may, either before or after the institution of proceedings for any
offence punishable under this Act or any rules made there under, accept from any
person charged with such offence by way of composition of the offence such sum not
exceeding double the maximum amount of fine to which he is liable on conviction for
such offence, as may be determined by the State government or the authorized
officer, as the case may be.
(2) On payment of such sum as may be determined, no further proceedings shall be
taken against the accused person in respect of the same offence.
19. Power to require production of accounts or to inspect accounts.—The State
Government or any officer authorized by it in this behalf may, for the purposes of this
Act, at all reasonable times—
(1) require the licensee to produce before it or him accounts or other documents or
to furnish any other information, or;
(2) inspect the accounts of the licensee.
20. Power of entry and search.—(1) It shall be lawful for any police officer, not
below the rank of Deputy Superintendent of Police, authorized the State government
in this behalf by general or special order in writing;
(i) to enter, if necessary, by force, whether by day or night, or with such
assistants as he considers necessary, at any premises where he has
reasonable cause to believe that any provision of this Act or the rules made
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there under are or are being or are likely to be contravened or a breach of any
of the conditions of the licence is or is likely to be committed;
(ii) to search the place and the persons whom he may find therein;
(iii) to take into custody and produce before a Judicial Magistrate all such
persons as are concerned or against whom a reasonable complaint has been
made or credible information has been received or a reasonable suspicion
exists having been concerned with any contravention or breach referred in
clause (i), and;
(iv) to seize all things found therein which are intended to be used or are
reasonably to have been used in connection with contravention or breach.
(2) All searches under this Section shall be made in accordance with the provisions
of Code of Criminal Procedures, 1973.
21. Offences to be cognizable and bailable.—All offences under this Act shall be
cognizable and bailable.
22. Protection of action taken in good faith.—No suit, prosecution or other legal
proceeding shall lie against the State Government or any officer of the Government or
any other person exercising any powers or discharging any functions or performing any
duties under this Act for anything in good faith done or intended to be done under this
Act or any rule or order made there under.
23. Power to make rules.—(1) The State government may, by notification in the
Official Gazette, 27 [* * *], make rules for carrying out the purposes of this Act.
(2) In particular and without prejudice to the generality of the foregoing power,
such rules may provide for all or any of the following matters, namely:—
(i) The online casino games and sports games, for the purpose of the Act and the
rules to be observed in playing such games;
(ii) The form and manner of making application for the licence and the fees to be
paid for its grant or renewal and the conditions subject to which it may be
granted;
(iii) The manner of keeping accounts relating to Online Games 28 [and Sports
Gaming], the other particulars to be shown in the accounts, and the form in
which and the intervals at which they shall be submitted to the State
Government, or to the authorized officer;
(iv) The restrictions or conditions with regard to the age or other conditions of
the persons who may be employed for Online Gaming 29 [and Sports Gaming],
or who may be permitted to play online games or otherwise take part in the
organization or exhibition of such games;
(v) The other restrictions or conditions with regard to the admission of the
participants and the fees, if any, to be charged for their admission;
(vi) The types of notices to be exhibited and the manner in which they are to be
exhibited on the online gaming 30 [and Sports Gaming] 31 [terminal];
(vii) The restrictions or conditions with regard to the advertisements pertaining
to Online gaming 32 [and Sports Gaming];
(viii) The restrictions or conditions with regard to providing credit facilities by the
licensee to the participants of online gaming 33 [and Sports Gaming] and the
prohibition or regulation of participation by proxy in the online games 34 [and
Sports Gaming];
(ix) Any other matter which is required to be or may be prescribed.
24. Rules made shall be laid before each house of the State Legislature.—Every rule
made under this Act shall be laid as soon as may be after it is made before the House
of the State Legislature while it is in session for a total period of thirty days which may
be comprised in one session or in two successive sessions, and if, before they expiry of
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the session in which it is so laid or the session immediately following, the House
agrees in making any modification in the rule or the House agrees that the rule should
not be made, and notify such decision in the Official Gazette, the rule shall from the
date of publication of such notification have effect only in such modified form or be of
no effect, as the case may be; so however, that any such modification or annulment
shall be without prejudice to the validity of anything previously done or omitted to be
done under that rule.
———
1.Received the assent of the Governor on 28th day of June, 2008, published in the Sikkim Government Gazette,
No. 322, dated 30-7-2008.
2. Subs. for “a tax” by Sikkim Act 16 of 2017, S. 3 (w.e.f. 8-9-2017).
3. Ins. by Sikkim Act 20 of 2011, S. 2 (w.e.f. 2-1-2012).

4. Ins. by Sikkim Act 7 of 2009, S. 2(a) (w.e.f. 4-8-2009).
5. Ins. by Sikkim Act 7 of 2009, S. 2(b) (w.e.f. 4-8-2009).
6. Subs. for “lottery” by Sikkim Act 7 of 2009, S. 2(c ) (w.e.f. 4-8-2009).

7. Subs. for “a lottery” by Sikkim Act 7 of 2009, S. 2(d) (w.e.f. 4-8-2009).
8. Subs. for “Online Gaming Website” by Sikkim Act 5 of 2015, S. 4 (w.e.f. 6-8-2015).

10. Ins. by Sikkim Act 7 of 2009, S. 2(e) (w.e.f. 4-8-2009).
11. Subs. for “internet website” by Sikkim Act 5 of 2015, S. 4 (w.e.f. 6-8-2015).

13. Subs. for “Online Gaming Website” by Sikkim Act 5 of 2015, S. 4 (w.e.f. 6-8-2015).
14. Ins. by Sikkim Act 5 of 2015, S. 3 (w.e.f. 6-8-2015). Prior to substitution it read as:
“(2) No Online Games shall be played, organized or exhibited to any person at any public place, except
through Online Gaming website) in respect of which licence is granted in accordance with the provisions of
this Act and such licence is in force.”
15. Subs. for “Tourism Department” by Sikkim Act 7 of 2009, S. 3 (w.e.f. 4-8-2009).
16. Subs. for “a levy” by Sikkim Act 16 of 2017, S. 3 (w.e.f. 8-9-2017).
17. Subs. for “website” by Sikkim Act 5 of 2015, S. 4 (w.e.f. 6-8-2015).

18.
Ins. by Sikkim Act 7 of 2009, S. 4 (w.e.f. 4-8-2009).

26. Subs. for “such sub-section” by Sikkim Act 7 of 2009, S. 5 (w.e.f. 4-8-2009).
27.The words “and subject to the condition of previous application” omiited by Sikkim Act 7 of 2009, S. 6(a)
(w.e.f. 4-8-2009).
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29.
Ins. by Sikkim Act 7 of 2009, S. 6(b) (w.e.f. 4-8-2009).
32.
Ins. by Sikkim Act 7 of 2009, S. 6(b) (w.e.f. 4-8-2009).
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SCC Online Web Edition, © 2023 EBC Publishing Pvt. Ltd.

Page 1 Wednesday, September 06, 2023

1. Short title, extent and commencement

7. Variation and Transfer of Licence

10. Marketing and promotion

11. Power to suspend or cancel licenses

12. Penalty for contravention of conditions of licenses

12-A. Appeal against order of the Authorized Officer

12-B. Authority for overseeing online gaming etc

14. Penalty for failure to keep and submit accounts

15. Best Judgment assessment in certain cases

16. Penalty for contravention of conditions of licence or of rules by persons

17. Offences by Companies

18. Compounding of offences

19. Power to require production of accounts or to inspect accounts

20. Power of entry and search

21. Offences to be cognizable and bailable

22. Protection of action taken in good faith

23. Power to make rules

Sikkim Online Gaming (Regulation) Act, 2008

technical as well as administrative and legal as may be constituted by the

distributed or intended to be distributed in respect of any gaming;

3. Ins. by Sikkim Act 20 of 2011, S. 2 (w.e.f. 2-1-2012).

6. Subs. for “lottery” by Sikkim Act 7 of 2009, S. 2(c ) (w.e.f. 4-8-2009).

9. Ins. by Sikkim Act 5 of 2015, S. 2 (w.e.f. 6-8-2015).

12. Ins. by Sikkim Act 16 of 2017, S. 2 (w.e.f. 8-9-2017).

17. Subs. for “website” by Sikkim Act 5 of 2015, S. 4 (w.e.f. 6-8-2015).

23. Ins. by Sikkim Act 7 of 2009, S. 4 (w.e.f. 4-8-2009).

28. Ins. by Sikkim Act 7 of 2009, S. 6(b) (w.e.f. 4-8-2009).

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