This article is written by Charul Mishra, pursuing B.A.LLB from Symbiosis Law School, Hyderabad in this Article. The author 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.
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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