In this article, Aditya Swarup of NLU-O discusses the legality of online betting in India.
Betting or gambling is illegal in most part of India. But there are no such laws present in India which makes online betting illegal and punishable. While the police have arrested many people in the past from different parts of the country for allegedly involved in inter-state online betting but there are many offshore companies using the loopholes present in the law to lure Indians to bet online.
There are the certain exception to the betting rules in India but the confusion about the legality of online betting is caused by lack of cohesion of laws among the central and state government. It is also caused by not giving any updated or modern law to deal with in the present modern world.
The purpose of this article is to bring all conflicting information together to give a clear and concise view about the legality of online betting in India.
What is betting?
Betting is generally the wagering of money or something of value on an event on an uncertain outcome with the primary objective of winning. Section 29 of the Indian Contract Act,1872 clearly states that all the wagering agreements are illegal in India. Online betting is generally betting using a web or any online platform to place a bet.
Types of betting
Betting is basically one form of gambling which depends upon the final outcome of the result. So, different types of bettings are:
- Slot Machines
- Scratch cards
- Sports Betting
- Online sports bettings
Online Betting Laws in India
Web gaming or electronic betting gaming laws are still developing in India. There is no such law present in India which may tell us about the legality or illegality of online bettings in India. There are many online platforms like Dream11, Cricket360.com etc. where an Indian can take parts in the online betting. Generally, these websites claim that there is no betting involved, only there is a pure use of skill and knowledge about the prediction of the result of the game which is not same like betting.
As the presence of confusion and unclarity about the present betting laws in India, it falls under the obscure grey of law since the Supreme Court of India has also refused to decide the matters related to the online gaming or betting platforms.
Centre and State perspective about online Betting
As betting and gambling comes under the jurisdiction of the state, the different state has reacted in a different manner in this aspect. While the state like Nagaland and Sikkim has adopted a very liberal approach but states like Maharashtra or Delhi has adopted a very conservative approach.
Central Government on Online Betting
As per the Consolidated FDI Policy Circular, 2015, Indian Government has clarified that FDI is directly illegal in the online gaming, online betting, online lotteries etc. and this also includes online betting in casinos etc. As far as the intention of the Central Government of India is concerned, it is not in favour of providing any support or allowing any type of FDI in the online betting platforms.
Further, the Central government has also refused to give any opinion about the legality or illegality of the online betting and also the Supreme Court of India has refused to provide any opinion about the same. As a result, online gaming or online betting entrepreneur in India has to comply with different laws present in both state and center legislation. There is also no command of the watchdog authority as the absence of any law and in my opinion, these entrepreneurs are simply violating the gambling laws those are present for offline or conventional bettings.
State Governments on Online Bettings
In 2016, Sikkim is the only state in India which allows betting online in its state. In the year 2016, the government has provided the license to Golden Gaming International Pvt. Ltd. to operate online gaming and betting operations inside the state. But in the same year, the government amended the rule to ban person residing in the state from entering casinos. But the state government has not released any notification regarding the banning locals from playing the online betting games.
Let us take a look Sikkim On-line Gaming (Regulations) Rules, 2009
On March 4, 2009, the Government of Sikkim issued a memorandum known as “Sikkim On-line Gaming (Regulations) Rules, 2009”. This outlines the rules for online gambling license within the state. This act made Roulette, Blackjack, Pontoon, Punto Banco, Bingo, Casino Brag, Poker, Poker Dice, Baccarat, Chemin-de-for, Backgammon Keno, and Super Pan 9 legal games for online play.
- Any operator wishing to operate these games must start with paying an application fee of 500 rupees and if this is approved, one year license for a period of one year will be issued to them and can be renewed every next year after the payment of the same amount.
- Operator licensed are assessed a monthly tax of 1 percent of the gross yield of the game. This tax must be paid before the 15th of each month otherwise a penalty of 20 percent will be added.
- Also, all operators are required to post a bank guarantee of 5 crores to the bank in the favor of government which is valid for 1 year and same has to be done for the subsequent years for obtaining the license.
- All the gambling sites licensed by the Sikkim government must display full name and office address, the number of the license under which the online gaming is conducted, the date on which license was granted, a statement that it is regulated by the Sikkim Government etc.
- Every advertisement for the same must contain the sites URL in clear print, it also must not be indecent, offensive, or contain sexual content. It also shall be based only on facts and not contain any false, deceptive or misleading information.
- On 1 August 2009 the State of Sikkim Government posted the Sikkim On-line Gaming (Regulation) Amendment Rules, 2009, which made online sports betting legal in the state.
- To date, the only gambling site operating from Sikkim is PlayWin Lotto.
Other States on Online gambling
While states like Delhi or Maharashtra directly bans any type of betting either online or offline. On April 15, 2018, also, Delhi police arrested 3 bookies involved in operating the online betting rackets in Delhi and other neighboring states.
- While some state like Nagaland and not cleared it any approach in this field.
- Goa is another state which legalizes traditional or offshores betting. But this state legislation has also not cleared its opinion about the online betting platforms inside the state.
- Andhra Pradesh allows bettings on horse racing, rummy, and state-run lottery platform but is strict against the online gambling platforms where online betting is done.
- Karnataka was involved in one of the landmark judgment of MJ Shivani v. State of Karnataka where the Supreme Court found that rummy was not gambling but a use of skill and according to the present Indian laws, the game which involves the use of skills is not illegal. However, the state has banned almost all type of betting activities inside the state in 2007.
- While some of the states like Maharashtra, Tamil Nadu, Uttar Pradesh legalize horse racing betting and several types of betting inside the state but prohibits other types of betting.
Online wagering areas or allowing wards
Approving specialists, in some of the nation, are basically national governments duty which has approved request giving them the advantage to permit and facilitate the action of electronic betting. Nations all around do this to make compensation. Endorsing experts have been organized in little countries with constrained customary assets or an unsophisticated economy. Inside these areas, there is generally a huge focal alliance that the two issues licenses and blueprints licensees. Holding a permit from one of these bodies gives a site the advantage to make its associations accessible in various world betting markets. In various parts of the world, working a betting site without such a permit is unlawful.
Exactly when a manager needs to open another wagering site, they search for approving pros correspondingly we scan for somewhere else to play blackjack or bet on our most adored diversions. These specialists have criteria that format what an online wagering premium must do remembering the true objective to pick up and after that keep up an overseer’s allow.
Online Betting Laws in India
It is quite easy to interpret that online betting or gambling laws are vague and open to interpretation. If we ask about the online betting laws from different lawyers, we will get the different answer.
Online gambling is not specifically mentioned in any of the gambling acts of the Central government and basically falls under the grey area of law. Some of the lawyers argue that it is governed by the Public Gambling Act of 1867 as it restricts any type of gambling but there is a problem in this as this law has not defined gambling itself. The Indian Contract Act, 1872 states that all those agreement which are based on wager which comes under betting is illegal but this act has also not defined the wagering agreement.
Although all types of gambling are banned in India there is no law which specifically deals about the online betting agreements. The one exception is horse racing as Supreme Court has declared this as a game based on the pure skill of a person.
Offshore betting sites such as have already entered into the Indian market and also allows Indians to put bet. Since the web world is borderless, it is not possible to stop online betting without a specified law. At center level, gambling is basically governed by the following laws:
The Public Gambling Act, 1867
The Public Gambling Act of 1867 makes all types of betting or gambling illegal. This act basically talks about the betting done a specific house or place and ban every type of betting activities done in a place.
This act predates the web world for more than 100 years so it is quite ambiguous to refer that whether an online betting comes under the ambit of this and whether to refer a web platform “place”. Also, whether the online betting can be governed through this act.
Also, this act has provided any concrete definition of gambling so this becomes a topic of debate whether to add online betting in the ambit of this law.
Prize Competition Act, 1955
This act talks about certain specific types of betting but does not give any clear picture about the online betting. Basically, this act is applied to every type of betting games in which a specific prize is awarded but it is very difficult to interpret whether it talks about the online betting games or not.
The IT Act, 2000
The IT Act, 2000 is quite ambiguous and very difficult to interpret as it is so broad in scope. This act talks about the messages or online content which may cause harm to any person and also allows severe punishments to the offender. So this also becomes a question of debate whether gambling can be considered as a message capable of causing injury to any person? Till now no one has been charged for betting under this act but it also becomes a question of debate that whether a person can be charged for online betting under this act?
Most betting legislation restricts the
- Owning or possessing any place which is used for betting.
- Printing, distributing or offering any type of betting documents or supporting or encouraging any type of betting.
- Betting on any particular road, place or avenue.
- Outfitting cash for betting.
- Betting fundamentally.
Cases filed for banning online lotteries or betting from other states in Maharashtra and in other states
The PIL filed in the state of Maharashtra expressed that the state government has allowed only 13 online lotteries. In any case, directors with approvals from states like Mizoram, Arunachal Pradesh, Sikkim, and Meghalaya, are coordinating on the web lotteries where comes to fruition are accounted for in predictably on single-digit. The specialist named the entire development as totally unlawful. According to lottery rules bound by the Maharashtra government, it’s required for overseers to pay move force on an extensive variety of online lotteries in the state. In any case, the lottery associations tried authenticity of guidelines and the high court had offered a reprieve stay on it. Abusing it, the online lottery associations from outside states avoided the portion of appraisal to the tune of Rs 933.14 crore in the midst of 2007-09. In 2009, the high court lifted the break remain and empowered the state government to assemble the cost, anyway no recovery has been made.
Recently there were many raids done by police against the operators of online lottery and website in Delhi. Police arrested at least 8 offenders who were involved in the online betting agreements and filled a case against them. This gives us a clear idea that online betting is not legal in India except Sikkim.
Law Commision on Online Betting
The Law Commission of India, in its 276th report, has recommended legalization of regulated betting and gambling activities, declaring that a total boycott has not been restoring the coveted outcomes.
The report titled, “Legal Framework: Gambling and Sports Betting including in Cricket in India” states, “”Having discussed the pros and cons of legalizing regulated gambling and betting activities, it would be apt to say that the arguments in favor of the same far outweigh the arguments alluding to the immorality of these activities Since it is not possible to prevent these activities completely, effectively regulating them remains the only viable option. Thus, if Parliament or the State Legislatures wish to proceed in this direction, the Commission feels that regulated gambling would require a three-pronged strategy, reforming the existing gambling (lottery, horse racing) market, regulating illegal gambling and introducing stringent and overarching regulations.”
Recommendations by the Law Commision
- Since web-based wagering and betting are offered and played over media (phones, remote, telecom and other like types of correspondence) secured under Entry 31 of List I of the Seventh Schedule to the Constitution, the Parliament has the legislative competence to enact laws dealing with the same.
- The Parliament may also enact a model law for regulating gambling that may be adopted by the States or in the alternative, the Parliament may legislate in the exercise of its powers under Articles 249 or 252 of the Constitution.
- In order to protect the public from the ill-effects of these activities and with a view to having enhanced transparency and state supervision, all betting and gambling transactions should be linked to the operator’s as well as the participant’s/player’s Adhar Card/Pan Card.
- The transactions made between and among operators and players/participants indulging in these activities should mandatorily be made ‘cashless’. This would go a long way in enabling appropriate authorities to keep a close eye on every single transaction so made. Necessary provisions should be made part of the relevant law(s), attracting penal consequences for cash transactions so made.
What this all means
In summary, we can clearly say that gambling laws in India are confusing and aimlessly governed. The reality of it for online gambling is thousands of people daily place a bet on online betting platforms. There are no laws specifically present which states that online betting is illegal in India. So we can say if you live in India, you have access to online betting platform without any legislation governing its legality or illegality of this act.
We can say that it is legally illegal but you can bet online in India. At the present time – most betting in India is illicit. Be that as it may, lawful betting exists for horse dashing, lottery, and so on. There is additionally a high number of wagering locales lawful in the UK which benefit Indians with just minor bother. The law right now appears to be more worried about terrifying Indians not to bet, than it does much to counteract it. It appears to be exceedingly likely completely lawful betting will come to India sooner or later – how far away that is, is impossible to say.