This article is written by Vishruti Chauhan, from Symbiosis Law School, Hyderabad. This article analyses various gambling laws across the world, various judicial pronouncements concerning the same and challenges faced while legalising it.   

Introduction

Gambling is not a new concept to discuss. It has been a controversial topic for many countries. And it’s not a new topic in its formation as well, as gambling has been in existence since the time immemorial. From the Indus Valley Civilization to the Mesopotamian period, there have been ample pieces of evidence of the existence of the game. It is seen as a game of skill by some and a game of luck by others. It involves consideration, risk, prize and is a game of probability, and permutations and combinations. 

Gambling has been a topic of debate due to the moral issues revolving around it and the psychological effect it has on the players. Fyodor Dostoevsky implicates the associated gamblers with the psychology of ‘getting rich quick and as soon as possible’. In a case where a person gets addicted to earning more money through this, they suffer from helplessness and anxiety. 

On an international level, there is no consensus among the countries to regulate it. Even on the national level, most of the countries have different laws in different states. Thus, the regulation of gambling on a general level is difficult. There are different types of gambling such as Casinos, Table and Electronic games, Card Games, Betting on Sports Games, Dice Based Games, Bingo, Coin Tossing, Parimutuel Betting and Online Gambling. These are the major types of gambling which are used widely all over the world. 

Which countries have legalized gambling

There are many types of gambling and every country has separate legal laws for each of them. India, United Kingdom, USA, China, Australia, Ireland, Finland, Canada, Thailand and New Zealand are some of the major markets for gambling businesses. What is interesting to note is that there are some countries where gambling of any kind is strictly prohibited such as the United Arab Emirates and Brunei because the concept of gambling goes against the culture and ethics of the country. North Korea also doesn’t allow for any kind of gambling, however, it is allowed for tourists with guided tours.

For other countries where gambling is legalised, it differs from state to state and country to country. For example, in the USA, there is a federal law for gambling, but it also depends on state to state which type of gambling is legal and which is not. In countries like Japan, gambling was illegal for a long time but recently betting in sports activities has been legalised and various casinos have also been opened. Therefore, even in countries where gambling is legalised, it ultimately depends on the kind of gambling taken into consideration.  

What are the effects of legalizing gambling

There are various effects of legalising gambling which is positive as well as negative:

Employment 

Opening up of casinos or other types of gambling modes may help in providing employment to the local people in places where the unemployment rate is higher. It not only provides a good amount of income but is also beneficial for both the skilled and unskilled labour. Gambling creates a variety of jobs like waiters, casino bosses, dealers, cleaners, security personnel etc. Even in the case of online gambling, there is a dealer and sometimes sponsors as well.   

Economic Development 

The biggest benefit of opening up of gambling games is that it boosts up the economy very rapidly, the USA being the biggest example. Due to such establishments, there is an increase in income, tax revenue and property value and it also attracts other companies to set up their businesses near these spots. Thailand has also become one of the hubs for casinos and other gambling games.  

Tourism 

There will be a rapid increase in tourism at such cities where casinos are established and thus, in turn, it helps in increasing foreign exchange. Tourism is a crucial part because in some countries even if gambling is allowed only for tourists and not for local people, it still generates a huge amount of income. 

Effect on Local Businesses

There can be a loss to local businesses in such a situation as people may be more attracted to the gambling genre and the other businesses pertaining to entertainment or relaxation might end up in trouble. Furthermore, such places also take most of the employment, thus, it can be an issue for local businesses. However, in a different scenario certain type of businesses can profit as well due to the large flow of customers in that certain area.   

Crime and Cultural Effect

At the end of the day, gambling centres may become prominent places for rich people or even thugs and the amount of money that is put in-and-out can become a cause for major concern for safety. On one hand, it can be handled if regulated properly but the majority of the times, it may result in giving rise to more crimes, like drug trafficking, prostitution, etc. Furthermore, the cultural aspect of such games and the tourists or the different types of people that it attracts might not go with every culture. This is one of the reasons that it is prohibited in many countries. The culture change that a place can experience because of the legalisation of such games does not go well with many countries.    

Psychological Effect

There are two aspects to this:

1. First, these games are very beneficial in relaxing one’s mind and which is why they are in existence in the very first place. It can be very relaxing, energising and fun for people, which are some of the great aspects and the aim of it. Many people dealing in big businesses and high profile jobs find it very relaxing and become frequent customers to casinos or online games.   
2. However, there have been many concerns with such games and the second effect being one of the reasons why they are not regularised properly. It can create a scenario of addiction for a person to win more money and in case of bad luck, people tend to lose everything they have. Such types of cases end up with people being depressed, anxious and even suicidal in worst cases. Gambling is seen as a toxic culture in many countries because of this same issues. People tend to bet everything they have to win money and the loss and helplessness sometimes force them to use criminal life to feed themselves.               

Is Internet Gambling legal

Internet gambling has been a topic of immense discussion recently and various countries have approached the same with different strategies. Online gambling has been in popularity since the Internet boomed up in the 21st century. In many countries, the practice has taken an illegal turn due to its huge popularity and no regulation in place. Online gambling is a grey area for many countries as it is difficult to operate and keep track of such monetary transactions in case foreign transactions are being made. Thus, it becomes very crucial to understand and demarcate a legalised pattern for the same. In countries like Africa, where even availability of the Internet is a crucial problem, this issue doesn’t arise. But in a country like India with a huge population and extensive use of the Internet, it is very likely that the betting will be done illegally, if not provided with a proper provision.

In Canada, it is not clear, as per the legislation, the regulation of online gambling, but it is not illegal as provided by its Act. Also, there is no proper mechanism to regulate the same. In the US, some states have legalised online gambling, but some states are still pondering upon the difficulties that the economy may face in such situations. Countries like the UK, Japan, Spain, France, Australia, China and Thailand have laws providing for legal online gambling. In India, online gambling is allowed in only two states- Sikkim and Goa.   

Gambling legislation and regulation

In North America

The United States of America

There are federal laws in America regulating gambling, and the states and locals have their own laws as well for the same. The Indian Gaming Regulatory Act, 1988 gives the right to Native American Tribes to regulate gambling on their lands. It is a federal law which restricts the boundaries of such games, if it is prohibited by the criminal law, as opposed to public policy or any other federal law.

Another federal law which expressed the regulation of online gaming is the Unlawful Internet Gambling Enforcement Act of 2006. The Act focused on the financial transactions being sought for the use of gambling business and regulated that for any such use of online gambling, no ‘restricted transactions’ should be used. Another important Act is The Interstate Wire Act 1961 which prohibits interstate betting by use of a wire communication facility for any betting game or sports event but exempts it if it is legal in both the states where the money is being transferred to.       

Canada 

Gambling in Canada is regulated on the Federal level by the Criminal Code of Canada whose Section 201- 207 provides for laws relating to betting and gambling. According to the law in Canada, gambling of any kind is prohibited but there are certain exceptions to the same. Section 204 of the said Act provides for certain exemptions such as betting on lawful races or sports games and pari-mutuel system on running or trotting. 

The Minister of Agriculture and Agri-Food has the responsibility to regulate such bettings as has been prescribed. Furthermore, Section 207 of the said Act provides for lotteries to be lawful if regulated by the Government. Other than this, there are separate laws for each State such as Ontario has laws regulated by the Ontario Lottery & Gaming Corporation Act, 1999 and New Brunswick regulates it by Gaming Control Act.     

Mexico

In Mexico, gambling is regulated by the Gaming Regulations. It regulates all gambling games and is governed by the law except the National Lottery, which is ruled through its own regulation.        

In Europe 

The European Union works as a one-state in certain matters such as trade and transportation. In the case of gambling, there is no specific legislation or regulation that provides for laws concerning the same. There is only one specification, that is, every country of the EU has to comply with the provisions mentioned in the Treaty on the Functioning of the European Union (TFEU). 

There are provisions which provide for the functioning of businesses in any country of the European Union. There are fundamental freedoms provided under the Treaty and they have to be complied with. Other than that, the type of games which have to be regulated within a specific country is the discretion of that country.

Some countries are restrictive in nature and only allow poker or casinos. While some are regulating laws for online gaming as well. In France, the regulations are governed by different laws for horse racing, betting and online gaming. In Germany, there has been no structural consensus on a variety of factors and there have been questions about the monopoly of gambling. Italy has liberal laws regarding the same and where the various countries in the EU have been so strict in regulating online gaming, Italy has been very liberal about the same.      

In the UK

The UK has been very standardised in regulating gambling and making provisions for the same. The major Act regulating it being The Gambling Act of 2005. There are specific and very strict laws that provide for different types of games. The laws are made with an objective that such games do not give rise to crimes in the country. The Act also establishes a Commission to oversee the activities of gambling and the provisions of licensing as well. Apart from it, there are other legislations that concentrate on specific types of games such as Horserace Betting & Olympic lottery Act, 2004, Categories of Casino Regulation, 2008 and Gambling (Licensing & Advertising) Act, 2008. There are various other regulations that provide a structured pattern to the regulations of gambling in the UK.      

In Australia

In Australia, there is a federal law for gambling and every State has its own separate regulation for such games. The Interactive Gambling Act, 2001 is the federal law that governs gambling in Australia. It provides for regulations to licensing as well as to online gambling in Australia. The Act lays emphasis on legal gambling by way of licensing and excluded lottery service. Apart from it, every State has its own regulation for gambling. 

For example, Victoria has the Casino Control Act, 1991 and Gambling regulation Act, 2003 among other laws. Similarly, New South Wales has Betting & Racing Act, 1998 and Casino Control Act, 1992 among other acts as well. Therefore, in consonance with the federal law on the Central level, gambling is regulated majorly on State level by rules made by the respective States.  

Important judicial pronouncements 

Harry Kakavas v. Crown Melbourne Ltd. & Ors

It is a landmark judgment of Australia regarding the care to be taken and duty of the Casino towards the gambler. The appellant was a problem gambler and had lost around $ 20.5 million dollars to the respondent, which is the Crown Casino in this case. He had been an old customer of the casino and was prohibited from coming there due to such problematic grounds, however, he came back after showing himself as being financially capable. He was further offered by the casino, free accommodations and various other perks such as a private jet to take him to the casino. After a point of time, he was in a loss of $20.5 million dollars to the Casino. 

He claimed that the Casino ‘lured’ him to play a lot of gamble by giving him perks and facilities so that he becomes a regular customer. He further claimed that the Casino had a duty to take care of the problematic behaviour of the appellant. 

The High Court of Australia held that the appellant was in a situation to assess his actions and behaviour. There was no particular behaviour from the side of Casino that could have landed him into trouble. Furthermore, the Court held that in case there was no legislation for the same, there is no general duty for a Casino to protect gamblers from themselves as in such a situation it will affect the whole business of gambling. Therefore, the judgment was given in favour of the Casino.       

Murphy v. National Collegiate Athletic Association

The case relates to The Professional and Amateur Sports Protection Act (PASPA), which is one of the provisions which prohibits the State to authorise any sort of sports gambling and, thus, was alleged to be violating the Anti-Commandeering Doctrine. The provision stated that it would not be authorised for any State to operate, sponsor, advertise, license or promote a lottery or betting or gambling based on a competitive sporting event. Thus, it was alleged that the provision put the State under the control of the Federal Government. The District Court and the Third- Circuit found no violation in the provision. However, the Supreme Court of the USA held that the said provision of PASPA violates the Anti- Commandeering Doctrine as it directly authorises the federal government to dictate actions to the State legislature. Thus, the judgment was reversed and the provision was held to be violative of the said doctrine.         

Pauline Mckee v. Isle Casino Hotel  

In this case, Pauline Mckee, an 87-year-old woman, was playing slots at Iowa’s Isle Casino when she received a message that she had won a bonus award of $41.8 million jackpot which came right after she had obtained a win of 185 credits. The Casino took some time and found out that there was malfunctioning with the machine and the lady had actually just won $ 1.85 and thus, it refused to pay the money to the lady. A suit was filed by the lady asserting breach of contract, estoppel and fraud.

The District Court gave the decision in favour of the Casino. She appealed and finally, the Court held that the lady was unable to prove the essentials of a contract and estoppel as the Casino never made a representation that she would win a bonus and nor did they make the promise afterwards. There was no proof of either of the claims and the fraud was also not proved as the Casino informed her of the mistake as soon as they found out about the same and gave the clarity as well. Thus, the Court gave the decision in favour of the Casino.

M/s Gaussian Network Pvt. Ltd. v. Ms Monica Lakhanpal 

This is an important judgment of India regarding online gambling. The Court observed, in this case, that there is a huge difference while playing gambling games online and while playing physically as the attributes of the skills are different while playing in these two modes. The skill that has to be used during physical play is much more than that has to be used during an online game. The Court further observed that there are many websites which allow a person to play for free and it was held to be valid. However, in case of online gaming where a service provider is involved, neither it can be said to be a fair play of game nor can it be stated that the game of skill has overlapped the game of chance.    

What are the issues and challenges faced in implementing gambling laws

Different laws over different regions

While implementing gambling laws, it becomes crucial to examine the region and state where it is being applied to as the cultural differences among regions create disorientation and it is difficult to implement a uniform law for the whole country. This is the reason why there are different gambling laws within a country that varies from state to state. In countries like the USA, European Union and India, it has become a common rule that the gambling rule changes from state to state, and country to country in case of the EU.     

A broad aspect of Definition

Another issue faced is that the definition of gambling which is provided all over the world is based on major three aspects- consideration, price and result by a risk. The issue while implementing such laws appears when there is an overlap of these aspects or a very broad range for the aspects are provided. Especially in the case of Internet Gambling, the risk or skill of taking a chance could change from game to game or even the consideration that has to be paid may not be just monetary and could be payable through some other way. It thus becomes crucial to think and include all options which can be exercised under these definitions.   

Booming Internet 

The fast booming Internet has created a lot more issues for gambling businesses. There are still many countries that are not able to regulate online gambling. However, it is important to do so, especially for a country like India as the population of the country shows a booming population using the internet as well. There are various issues with online gambling and it is important that any privacy issues or monetary issue should be regulated, otherwise the internet will cause an increase in internet fraud, trafficking, phishing, hacking and other crimes which could create problems for customers in future. These crimes are increasing day by day and thus, it becomes the biggest challenge for the government to regulate laws concerning the same.  

Jurisdiction

It is another issue that is faced during online gambling. In case of a dispute, it becomes very difficult to solve the problem jurisdictionally as the other party could be in a foreign land as well. There are laws in place for the same but they are not so strong or not so common for the common people to use it in case of fraud or a dispute. Even in the same country, this situation can arise as within a country the state laws are different. In the presence of federal law, many issues are resolved but with new booming online gaming, there are new challenges to the same.   

Advantages and disadvantages of having gambling laws

Advantages

1. Since it is already in play in some way or the other in the market, it is better to make it legal so that it can be regulated. 
2. With laws for the same, it will be easier to keep a track on the monetary value being used by the public and thus, it would be better for the economy.
3. Legalising gambling will strip away the black money up to a limit and it will give a window to earn the revenue out of the same.  
4. With laws in place, crimes will be less.
5. There will be employment opportunities created in case the Casinos are legalised and thus, implementing such laws would help in creating better infrastructure for that city. 
6. Gambling has been a part of the culture for too long in almost every part of the world and thus, it is important to give it a particular structure so that it can also increase tourism and help in foreign exchange. 

Disadvantages

1. It will give a blow to the already existing gaming industry and businesses.
2. Gambling can become addictive after a point of time which may otherwise create more broke people, eventually succumbing to criminal activities.
3. Legalising gambling will give away the temptation to play even to those people who were not playing before and have no idea about the system. This can lead to more crimes of fraud and cheating. 

Conclusion

Gambling has been a part of human life since time immemorial. It is difficult to strictly abolish this practice from a place where it has been practised for a long time. With the advent of the internet, the complexities have further risen and thus, it is very important to regulate the same. As far as the states which have their own gambling laws are concerned, it seems feasible because of the cultural differences that a place can have, however, there should be a balance between the federal and state laws. The major issue in the upcoming times is the regulation of online gambling and jurisdictional issues with a foreign country. Countries like the UK have structured the laws in a very sophisticated manner and it is high time that countries like India also do so in the future.     

References

• http://www.legislation.gov.uk/ukpga/2005/19/contents
• http://www.nishithdesai.com/fileadmin/user_upload/pdfs/Research%20Papers/The_Curious_Case_of_the_Indian_Gaming_Laws.pdf
• https://cyber.harvard.edu/fallsem98/final_papers/Glassberg.html
• https://ec.europa.eu/growth/sectors/gambling_en#:~:text=There%20is%20no%20sector%2Dspecific,the%20field%20of%20gambling%20services.&text=Most%20EU%20countries%20allow%20at,betting%2C%20poker%20or%20casino%20games
• https://govinfo.library.unt.edu/ngisc/reports/3.pdf
• https://iclg.com/practice-areas/gambling-laws-and-regulations/canada
• https://laws-lois.justice.gc.ca/eng/acts/C-46/page-48.html#docCont
• https://www.lawofthelevel.com/wp-content/uploads/sites/187/2016/04/Gamblification.pdf
• https://www.lexology.com/library/detail.aspx?g=cd49e0bb-4c54-4bf7-87db-713d5e9d809
• https://www.ontario.ca/laws/statute/99o12
• https://www.portilla.com.mx/archives/gam17_chapter20-mexico.pdf
• https://www.stlouisfed.org/publications/central-banker/fall-2003/employment-effects-of-casino-gambling-in-the-eighth-district

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