This article is written by Charul Mishra, pursuing B.A.LLB from Symbiosis Law School, Hyderabad and Khushi Gupta, pursuing LLB from Amity University, Kolkata. The authors discusses the gambling laws prevailing in India and how online gambling has posed a need for a separate law for gambling. To substantiate the legal concepts, various acts have been referred and explained concerning Gambling and its regulation in India.
Gambling can be defined as betting, gaming, or participating in an activity which is a game of luck and not the game of skill to win a bigger amount of money or any other prize by wagering some amount of money. The most important legislation that regulates gambling in India is the Public Gaming Act of 1867. This legislation was initially applied distinctly to the ten states which were under British control during that time but were further followed by every state in India initially. Later, the States formed their own legislations. Gambling, according to Jay Video Games and Electricals v. State of Gujarat in 2006 is understood to mean “the act of wagering or betting” for money or money’s worth. Gambling under the Gambling Legislations, however, does typically not include:
- Wagering or betting upon a horse-race/dog-race, when such wagering or betting takes place in certain circumstances,
- Games of “mere skill” and
Gambling in India is restricted to selected activities like lotteries and betting on horse racing, however, restricted gambling takes place illegally everywhere. This type of Gambling leads to various crimes like corruption, betting of things other than money, money laundering, etc. If we talk about legal gambling, it is one of the major sources for revenue for the respective state. In India, the major states that have legalized online gambling in casinos are Goa, Daman, and Sikkim.
Meaning of gambling
The definition of Gambling is not provided in the Public Gambling Act, 1867 but according to Black’s Law dictionary it “involves, not only chance, but a hope of gaining something beyond the amount played. Gambling consists of consideration, an element of chance and a reward.” However, according to various State Legislations and Judicial pronouncements, gambling does not include:
- Wagering or betting on Horse racing/ dog race – Wagering or Betting on Horse Racing, Dog racing is considered as a game of skill and is not covered within the ambit of the Public Gambling Act, 1867.
In the case of Dr KR Lakshmanan vs State of Tamil Nadu, (1996) 2 SCC 226, the Supreme Court recognised that horse racing, football, chess, rummy, golf and baseball are game of skill. It held that betting on horse – racing was a game of skill as it involved judging the form of horse and jockey and the nature of race, among other things.
2. Game of skill – Game of skill – In the case of M.J. Sivani and Ors vs State of Karnataka (1995) 6 SCC, 226, the Supreme Court while defining ‘Gaming’ observed that the definition of Gaming is an inclusive definition which includes a game of chance and skill combined or a pretended game of skill or of chance and skill combined. While explaining the meaning of games of skill, the court stated that no game can be based on skill alone. In any game where even skill is required, chance must have a specific influence. Indeed, even a skilled player in a game of mere skill may be fortunate or unfortunate, so even in a game of skill chance has its influence. Yet, while deciding whether a game is a game of mere skill or not, it is not essential to decide the relative proportion of chance or skill in terms of mathematical precision. A game should be considered as a game of skill when there is preponderance of skill over chance. A game cannot be merely based on skill.
The Bombay High Court in the case of State of Bomaby vs R.M.D. Chamarbaugwala, AIR 1857 SC 699 held that in competitions and/or games where the success of a player largely depends on skill, i.e.., there is preponderance of skill over chance, those games would not fall within the ambit of gambling. The Madras High Court in the case of Manoranjithan Manamyil Mandram vs State of Tamil Nadu, AIR 2005 Mad 261 has held that whether a game is of chance or skill is a question of fact and circumstances, that differs from case to case and therefore should be analysed on the basis of facts and circumstances of each case.
In the case of Andhra Pradesh vs K. Satyanaryana & Ors, AIR 1968 SC 825, the Supreme Court analysed whether rummy is a game of skill and chance. The court observed that Rummy is a game of skill and it has preponderance of skill over chance because the player requires substantial amount of skill to memorise the fall of cards, holding and discarding of cards for building of rummy. In this judgement Supreme Court has also brought ‘bridge’ within the ambit of game of skill.
Another issue that came up before the Kerala High Court was whether rummy played for stakes would amount to gambling under the Kerala Gaming Act, 1960. In the case of K.Ramachandran vs The Circle Inspector of Police, WP(C) No. 12828 of 2016, the Kerala High Court has held that if rummy is played for stakes it would involve the offence of gambling under the Kerala Gaming Act, 1960. Dissatisfied by the judgement of the Kerala High Court, a review petition was filed against its order in the case of Play Games 24*7 Pvt Ltd vs Ramachandran K & Anr, 2019 in WP (C) 35535/2018, where the court dismissed the petition and held whether Rummy is played for stakes or without stakes, including online rummy, will amount to violation of provisions of the Gaming Act or not has to analysed on case-to-case basis. The manner in which the games are conducted through traditional/physical or online methods and what are the stakes involved in the matter are all issues which may arise for consideration.
3. Lotteries and Daily Fantasy Sports – Lotteries are mentioned under Entry 40 in the Union List. It is governed by the Lotteries (Regulation) Act, 1998 and Lotteries (Regulation) Rules, 2010. Section 2 (b) of the Lotteries Regulation Act, 1998 defines “lottery as a scheme, in whatever form and by whatever name called, for distribution of prizes by lot or chance to those persons participating in the chances of a prize by purchasing tickets”. The Lotteries (Regulation) Act, 1998 was enacted with a view to allow State government to organize, promote and regulate or ban lotteries, subject to conditions lead down under this act. With the enactment of this act, private lotteries were banned in all forms. Some states like Madhya Pradesh have banned physical lotteries, whereas states like Sikkim regulate physical lotteries.
Although, Section 294A of the Indian Penal Code, 1860 prohibits private lotteries but certain states like Maharashtra, Gujarat, Andhra Pradesh have repealed this section of the IPC and have enacted their own state specific legislation prohibiting all kinds of private lotteries except non – profit lotteries.
In recent times, there has been a surge in the market of fantasy sports in India with new players moving in, MPL, Dream 11, My Circle 11, Balle Baazi etc are the prominent players in the market. The Gambling Laws in India only allows those fantasy sports where there is preponderance of skill over chance.
The Supreme Court in the case of Avinash Mehrotra vs State of Rajasthan, SLP No. (C) 18478/2020, upheld the decision of the Rajasthan High Court in Ravindra Singh CWP No. 7559 of 2017 and the decision of Bombay High Court in Gurdeep Singh Sanchar vs Union of India, Criminal P.I.L. No. 16 of 2019. to the effect that the online fantasy game, ‘Dream 11’ involves skill and does not amount to gambling.
Traditional and online gambling
With the growth of technology and internet infrastructure, the ‘gaming’ industry today compromises of gambling in both traditional and online forms and skill based social or casual gaming.
- PHYSICAL GAMBLING
As Gambling and Betting is mentioned under the Entry 34 of State List, the state legislatures have been entrusted with the power to frame state specific laws on ‘betting and gambling’. While some states have adopted the Public Gaming Act, 1867 while many states have their own state specific legislations. It is essential to note that majority of these gambling laws came into force prior to the advent of virtual or online gambling and refer to activities of gambling that place within an enclosed physical premises that is defined as common gaming house or gaming house.
Some Gambling Legislation regulating physical gambling are as follows:
- Public Gambling Act, 1867 (applicable to Uttar Pradesh, Punjab, Delhi and Madhya Pradesh)
- Assam Gaming and Betting Act, 1970
- Bombay Prevention of Gambling Act, 1887
- Goa, Daman and Diu Public Gambling Act, 1976
- Karnataka Police Act, 1963
- Madhya Pradesh (C.P.) Public Gambling Act,1867
- Orissa Prevention of Gambling Act, 1955
- Tamil Nadu City Police Gaming Rules, 1949
- Tamil Nadu Gaming Act, 1930
- The Andhra Pradesh Gaming Act, 1974
- The Andhra Pradesh Gaming Rules, 1976
- The Kerala Gambling Act, 1960
- The Meghalaya Prevention of Gambling Act, 1970
- The Pondicherry Gaming Act, 1965
- The Rajasthan Public Gambling Ordinance, 1949
- The West Bengal Gambling Rules, 1958
CONCEPT OF COMMON GAMING HOUSE
Under the Public Gambling Act, 1867 and various other state gaming legislations that declares gambling as an offence, most offences and prohibitions are in relation to a “common gaming house”. The Public Gambling Act, 1867 defines “common gaming – house” as any enclosed physical premises such as a house or tent where the instruments of gaming are kept or are used in such enclosed physical premises with the end goal of accumulation of benefit or profit to the individual owning, possessing, keeping such enclosed physical premises or using any instrument of gaming there.
However, in certain states like Delhi, in order to qualify an enclosed physical premises as a common gaming house, it is not necessary for the person who is owning, occupying or keeping such premises to accrue profit or gain.
But, on close analysis of the definition of the common gaming house in general it would be evident that the intent of the legislatures was to call a place a common gaming house only when the person owning, occupying or keeping such enclosed physical premises accrues profit or gain. Applying the same analogy to online gambling, thus when a person gambles online on various digital platform from this private house, it would not constitute a common gaming house because of the lack of intent on part of the owner of the house to accrue any kind of profit or gain from the use for his enclosed physical premises/house for gambling purpose.
Thus, in simple terms it can be concluded that an enclosed physical premises can only be called as a common gaming housing only when the owner of the premises intents to accrue profit or gain from the use of it for gambling purposes.
2. ONLINE GAMBLING
The Gambling Legislations were introduced prior to the advent of the online/ virtual gambling. Therefore, these provisions do not expressly deal with online gambling. Some states like Sikkim and Nagaland have adopted state specific legislation that regulates online gambling while other states like Telangana have amended their already existent state specific Gambling Legislation to expand its scope further to online medium
The legality of Gambling in India
With regard to the status of the legality of Gambling in India, there is no unified law regarding any activities of gambling as it comes under the State list of the 7th schedule of the Constitution. By this, every state has its own legislation that regulates gambling. But there is no uniformity in the state legislation with regards to the particular activity of gambling. Some states have a blanket ban while others permit some regulated forms of gambling. For example, Casinos are legal in some states such as Sikkim, Goa, and also the Union Territory of Daman. According to Section 12 of the Public Gaming Act of 1867, any game of mere skill will not be regarded as gambling, but games of chances will be.
Poker is a significant hazy area in Indian law because it could never be figured out whether it is a game of skills or game of chance. It’s very intriguing that games, such as wagering on cricket, are prohibited as given while Rummy is permitted as observed by the court under Mahalakshmi Cultural Association, rep. by its Secretary v. The Director, Inspector General of Police, State of Tamil Nadu, Chennai & Others in 2012. Gone are the times of Matka betting and the preferences in India. These days, you can just wager on a couple of sports/games, that too in some states. As of now, betting on horse racing according to, online poker in states like Goa and Sikkim, online rummy, lottery, and a couple of gambling clubs are legal in India in accordance with the case of K R Lakshmanan v. State of Tamil Nadu in 1996.
The Public Gaming Act made it unlawful to work at a place where gambling takes place under Section 4 of the Act. It likewise made it unlawful to visit such a place. While this is sufficiently clear, there’s no exact meaning of betting inside the above legislation. The Act states the meaning of Gaming as betting or wagering of money on a game which is a game of chance and not of skill except Horse Racing. This makes it difficult to decide whether any activity of gambling should be considered illegal or not. Although, Section 30 of the Indian Contract Act considering the agreement by the way of wager void with an exception with the certain prizing of the Horse Racing, this section does not give the sufficient definition of wagering as given under the case of Babasaheb Rahimsaheb v. Rajaram Raghunath Alpe in 1930. Apart from this, even when courts wanted to rely on a definition, they simply had interpreted the definition of gaming as provided in the Public Gaming Act according to their cases.
Laws about Online-based Betting
The Public Gaming Act of 1867 does not mention anything about online-based betting. Since, the use of the Internet and technology was far from being developed when the act was enforced, it can be expected that the act did not need to control online betting at that time. It could be contended that working in a betting site in India is considered illegal under the conditions of this legislation, however, it can also be considered as legal assuming the same reason. There’s additionally another act that could be considered to identify with web-based wagering and gaming i.e. The Information Technology Act of 2000. This makes arrangements for different offenses identifying with online gambling. However, similar to the Public Gaming Act of 1867, this act, also, does not mention Online based Betting separately. The Act only gives the Indian government the ability to search out and Check these sites if required.
The administration has utilized this capacity to educate Internet Service Providers to keep Indian citizens away from including themselves in illegal kinds of activities which might violate any law and also required them to block such sites. At the state level, there are two states which have acquainted enactment relating explicitly with Online based betting. If we talk about states like Maharashtra, online gambling is completely restricted, while in Sikkim the state policymakers have given the power to public authorities under Sikkim Online Gaming (Regulation) Act, 2008 to give licenses to such persons or agencies who wish to provide services of Online Based gambling within the state. This legislation is an encouragement to the other states of India to form such acts which regulate Online Gambling.
Game of Chance vs Game of Skill
A game of chance is a game whose result is influenced by a random number generator in which the contestant may choose to bet money for that result. While in a game of skill, A person bet on the result which comes out of the skills of another person, for example, Betting on Horse racing. However, in games like Poker and Rummy, many times the courts got confused about whether these are Game of Chance or Game of Skill. If talked about Poker, in most jurisdictions of India, the growing popularity of Texas Hold’em Poker cannot be doubted. Though there is a lack of clear jurisprudence on this subject in India presently, there appears to be an increasing trend internationally considering Texas Hold’em Poker as a game preponderantly of skill, and not a game of chance alone, except in the states of Gujarat and Telangana according to the case of Dominance Games Pvt. Ltd. v. State of Gujarat & Ors. in 2017, the Gujarat court held that poker is a game of chance and accordingly poker games and conducting the poker games falls within the prohibitions under the Gujarat Gambling Legislation.
Also, it was held that any game, even if it involves skill but is played with stakes, would fall within the ambit of gambling. Even in the Supreme Court Judgement of M.J. Sivani & Ors v. State of Karnataka & Ors in 1995 held while referring to the poker machines observed that these games are a game of chance. When we consider the game of Rummy, it is considered a game of skill as was reiterated in the case of Play Games 24×7 Pvt. Ltd v. Ramachandran K & Anr in 2019. It was also held that whether playing Rummy for stakes or not (including online Rummy) would amount to a violation of the Kerala Act would have to be seen on a case to case basis.
Wagering on Sports
Wagering in sports has become great controversy while we talk about the legality of such wagering. Since Horse Wagering is legal in India as given under Section 4 of the Public Gambling Act as well as in Section 30 of the Indian Contract Act, Betting in Cricket becomes a controversial issue. Cricket is a very popular sport in the country and this is why betting in Cricket is also very popular. While many do cricket betting through illegal street games, many licensed international betting sites carry on cricket betting. Many suggested that states should have legislation for betting in cricket in India by various agencies and committees like the Lodha Committee appointed by the Supreme Court. The Committee submitted a report which constituted the pros and cons of cricket betting. The Pros mainly stated that since Cricket betting is a game of skill while in the Cons they have stated that such betting might result in match-fixing.
Apart from this, even in the International forum, one of the great reasons for Match-fixing was known to be betting as said by Dr. Declan Hill, an academic expert of match-fixing at the University of Wizenberg. One such case happened in India in the 2013 Indian Premier League. The three representatives of the team Rajasthan Royals i.e. Sreesanth, Ajit Chandila, and Ankeet Chavan were arrested by the Delhi police on charges of Spot fixing and betting. Although, three of them cleared the charges but were given a life ban from all the forms of cricket by the BCCI. Later, the Supreme Court lifted the ban from Sreesanth. Since that time, cricket was not considered a sport for betting even though there are still various online sites available for betting on Cricket.
Legislations regarding gambling and betting in India
In Assam, the legislation followed for the regulation of gambling activities is the Assam Game and Betting Act, 1970. This Act does not allow staking of money or money’s worth on the happening or determination of an unascertained event, thing, or contingency for or concerning any game or sport, etc. It is also illegal to conduct any business venture allowing participants to play even skill games for money. The state government used to issue licenses to certain agencies to offer to bet on the game of skill but after enactment of the State legislation, all the licenses were revoked.
In Maharashtra, the legislation followed for the regulation of gambling activities in the Bombay Prevention of Gambling Act, 1887. This legislation expressly prohibits operating of the Gambling house, thus, prohibiting casinos in the state of Maharashtra. This legislation only allows betting on Horse racing and Lottery whose rules are governed by the Lotteries Act of 1998.
Goa, Daman, and Diu
In Goa, Daman, and Diu, the legislation followed for the regulation of gambling activities is the Goa, Daman, and Diu Public Gambling Act, 1976. This legislation allowed licensing luxury hotels for gambling. The legislation also permits all sorts of online gambling which is strictly regulated by the Gaming Commissioner appointed under the Act.
In Karnataka, the legislation followed for the regulation of gambling activities is the Karnataka Police Act, 1963 the applicable law to prevent gambling in the state. According to the legislation, all games of change except betting on horse racing is punishable.
In Orissa, the legislation followed for the regulation of gambling activities is the Orissa Prevention of Gambling Act, 1955. This Legislation is quite similar to that of Assam. This Act does not allow staking of money or money’s worth on the happening or determination of an unascertained event, thing, or contingency for or concerning any game or sport, etc. Also, it does not allow any kind of sports betting.
In Sikkim, the legislation followed for the regulation of gambling activities is the Sikkim Online Gaming (Regulation) Act, 2008. This act legalizes online gambling like Roulette, Black Jack, Pontoon, Punto Banco, Bingo, Casino Brag, Poker, Poker Dice, Baccarat, Chemin-de-for, Backgammon, Keno, and Super Pan 9. If any operator wishing to offer these games must start with paying a 500 rupee application fee. If their application is approved a one year license will be issued upon receipt of 1 lakh rupees and can be renewed each year for the same price. Also, in 2009, the Act also legalized Online Sports betting in the territory.
In Tamil Nadu, the legislations followed for the regulation of gambling activities are the Tamil Nadu City Police Gaming Rules, 1949, and Tamil Nadu Gaming Act, 1930. In the territory of Tamil Nadu, nearly all sorts of gambling is prohibited. Only Horse Racing betting and Rummy is allowed since it was considered a game of skill as provided in the case of Dr. K.R. Lakshmanan v. State Of Tamil Nadu in 1996 and State of Andhra Pradesh v. K. Satyanarayana in 1967 by the Supreme Court respectively.
In Andhra Pradesh, the legislations followed for the regulation of gambling activities are the Andhra Pradesh Gaming Act, 1974, and the Andhra Pradesh Gaming Rules, 1976. In the state of Andhra Pradesh, most of the gambling activities are illegal except for betting on Horse racing, Rummy, and lottery. The State has gradually allowed Poker and casinos in the territory of Andhra Pradesh where only selective shops can run such gambling.
In Delhi, the legislation followed for the regulation of gambling activities is the Delhi Public Gambling Act, 1955. In the territory of Delhi, both physical and online gambling is allowed. However, public gambling is prohibited by the legislation. Games coupled with stakes are permissible in Delhi.
Jammu and Kashmir
In Jammu and Kashmir, the legislation followed for the regulation of gambling activities is the J.&K. Public Gambling Act, 1977. The Act does not specify the particular of the gambling activities legal in the territory but has generally legalized betting on Horse racing and Rummy.
In Kerala, the legislation followed for the regulation of gambling activities is the Kerala Gambling Act, 1960. Gambling like Lottery, Horse racing betting, and online casinos are permitted in the state of Kerala. But all the acts are strictly regulated by the legislation.
In Meghalaya, the legislation followed for the regulation of gambling activities is the Meghalaya Prevention of Gambling Act, 1970. Wagering in Teer(Arrow) and Lotteries are the only forms of gambling which are allowed in Meghalaya.
In Pondicherry, the legislation followed for the regulation of gambling activities is the Pondicherry Gaming Act, 1965. All the common kinds of gambling like horse race wagering, rummy are legal in Pondicherry. Apart from this, only a few hotels have been permitted in Pondicherry to have casinos.
In Rajasthan, the legislation followed for the regulation of gambling activities is the Rajasthan Public Gambling Ordinance, 1949. All sorts of Gambling in this state has been considered illegal integrally. However, there are various places in Rajasthan that are famous for illegal betting and gambling.
In West Bengal, the legislation followed for the regulation of gambling activities is the West Bengal Gambling and Prize Competitions Act, 1957, the West Bengal Gambling Rules, 1958. West Bengal is the only state which exempt card games like rummy, bridge, and poker from gambling. Lottery and Betting on Horse racing is permitted while all sorts of other sports betting is prohibited. For the lottery, the Amended the legislation in 2011 which mandated that the lottery organizers pay as much as $1700 for each draw and around $8500 for bumper draws.
In Uttar Pradesh, the legislation followed for the regulation of gambling activities is the Uttar Pradesh Public Gambling Act, 1961. The Legislation bans all sorts of gambling except Horse race betting due to the Supreme Court Judgement. Apart from this, UP is famous for illegal gambling including betting on cricket and online gambling.
Apart from the aforesaid Acts, there are some Central legislations that are applicable in most of the states to regulate gambling in India. Those acts are The Public Gaming Act, 1867, The Information Technology Act, 2000, and lastly, The Payment and Settlement Act, 2007.
The Public Gambling Act, 1867
The Public Gaming Act, 1867 which is also known as the Gambling Act is a general law that governs the activities of gambling in India. However, the state legislatures, under the Constitution of India, have the power to form gambling legislation for their states. Thus, many states either adopted the central act or enacted their own legislation to regulate and control gambling activities in their territory. Currently, only Punjab and Madhya Pradesh have adopted this central legislation. According to Section 4 of the Act, “nothing in this Act shall apply to games of mere skill wherever played” which means, in the absence of other laws against them, wagering on games of skill is legal. The competitions where success depends on a substantial degree of skill are not “gambling” and despite there being an element of chance if a game is predominantly a game of skill it would nevertheless be a game of “mere skill”.
Payment and Settlement Act, 2007
This legislation regulates payments through pre-paid instruments, including e-wallets. This legislation plays an important role in the regulation of gambling as when payment systems are set up for online gaming websites, online gaming operators have to consider the category of pre-paid instruments that the wallet or account falls within. Certain payment systems require authorization from the Reserve Bank of India.
The Information Technology Act, 2000
This legislation is also one of the important legislation for regulation of mainly online gambling. The main responsibility of the act is that it directs intermediaries to remove or block access to any content that is deemed unlawful, including content relating to or encouraging money laundering or gambling. An intermediary must take down unlawful content within 36 hours of obtaining knowledge of such content, either by itself or after being brought attention to it in writing by an affected person. This way any illegal online gambling can be stopped by the Legislation. The only drawback of this act is that it does not define online gambling or any special rules for the same which makes it difficult to enforce the act into such domains. In one of the landmark cases of Shreya Singhal v. Union of India in 2015, it was stated that the provisions of the IT Act and the IT Rules must be interpreted to mean that the intermediary must receive a court order or notification from a government agency requiring the removal of specific information.
Although there are various legislations in the country for every state which recognize various activities of gambling as legal and regulate with the possible implementation of the legislation there is a need for segmentation which would provide which kind of gambling is legal and which is not for the whole country. Apart from this, no specific Central Laws are governing online gambling in India. Sikkim and Goa are the only States that expressly permit online gambling. Also, Such activities show no signs of being stopped or curbed; the least that could be done is to regulate them.
The Government, being a welfare State, acts in a manner to promote the economic and social well-being of its citizens, and therefore, it is incumbent upon the State to protect the vulnerable sections of the society. Regarding gambling, they can form a committee to survey the need for regulatory means for gambling and improvise on the current legislation based on such surveys. Thus, there is a need for initiatives to be taken from the side of the executives as well as the lawmakers to provide such guidelines which would systemize the system of gambling in India.
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