This article is written by Smaranika Sen, from Kolkata Police Law Institute. This article deals with the online gambling scenario in India.
Gambling has existed for a long time. It is a game of betting where money is involved as a bet. The game is based on an uncertain event, where the main aim is to win money or any goods. Online gambling has been in existence since the mid-1990s. Online gambling is the same as gambling. The only difference is that in online gambling the whole gaming process takes place over the internet. Virtual poker, sports betting, etc are different types of examples of online gambling. Both gambling and online gambling are prevalent in India. However, there still lies a lot of confusion regarding the prevalence of online gambling, its effects, legality, etc.
Online gambling: the current scenario
Online gambling is very popular in India. As the years are passing, online gaming is growing enormously. Some business tycoons have also stated that within 5 to 10 years, this industry will have massive growth and surpass many other online gaming industries. A study shows that in India, almost a huge section of young people, especially those below 45 years of age are involved in online gambling. This section of people consists of almost 75% of India’s population. This will enhance the growth of this industry.
The main attraction of this industry is the winning prize. Online gaming has always been a favorite of youngsters. But when such gaming involves cash or any material goods, more people are interested to play. People in the age group of 30 to 40 years are likely to play this game. A lot of websites are increasing day by day in the field of online gambling starting from casinos to online poker. Even the number of users is increasing day by day. An estimation of India’s online gambling market value is about $60 billion per year. Though 50% of it comes from illegal gambling.
One of the most important factors of online gambling is its prevalence to a huge lot of mass. Previously, for online gaming one has to depend on gaming consoles, desktops, etc. But now with the advancement of technology, online gambling can also be played on our smartphones. And we know that nowadays the availability of android or iPhones etc is very common. Even the way of playing such online gambling has become much easier and thus more and more people are playing it. The year 2020 and the ongoing year 2021 have shown a massive factor in the growth of the online gambling industry. Due to the pandemic, we are all sitting at our homes, and starting from work to education everything is being done over the internet. At this time, online gambling has been a boredom reliever to a lot of people. A huge section of people are now interested in playing it.
Advertisements of online gambling apps have also played a huge role in its growth. We all know how much India loves cricket. Apps like Dream11, Gamezy are being advertised in a huge way on television which is solely based on cricket. This has also influenced a lot of people.
Law and online gambling: the grey area
In India, online gambling or betting is under the control of the State Government. It is not illegal. There is no such particular provision or Act that is solely dedicated to online gambling and which prevents one from engaging in online gambling activities. The Constitution of India states that gambling or online betting is a state subject. It is at the discretion of the State if they want to prohibit any online gambling or exclude any game from the prohibition list in their respective States.
Every State has its legislation regarding online gambling. There is one Central Act i.e. Public Gambling Act, 1867 which is recognized by some states of India. However, provisions of online gambling are not expressly present there. This Act is also of the belief that the laws here are pretty old.
Online gambling is at times governed by the Information Technology Act, 2000. In this Act, online gambling provisions or punishments are not expressly mentioned. However, this Act gives the right to the government to block some foreign websites or illegal websites that might be harmful to the people of which are immoral to public policy. This Act also permits the government to take down any site which deems to be harmful.
One of the other important factors about online gambling which determines its legality in each State is the game of chance and the game of skill. The game of chance is such a type of game where the game is solely based on luck. In games of skill, the game is played predominantly based on skill. The skill needs to be nourished and the game should be such where the players need to have proper knowledge of the skill. For example, Poker is often considered as a game of skill as it involves a player who needs to have a piece of proper knowledge and experience in this field. It is believed that all games are somehow dependent on luck. But the only thing which differentiates the game of chance from the game of luck is the predominant factor applied in the game. Games of skill are often excluded from the prohibition list of online gambling activities in many States.
Regulation of gambling in India: the curiosity
One has to realize that gambling needs to be regulated in India. India consists of a huge population and it has been observed that more than half of the population is somehow involved in gambling. The 276th Law Commission Report gives us a detailed view of the gambling scenario and how laws are implemented or regulated in our society. Online gambling laws are solely governed by state legislatures. Some of the state laws on online gambling are:
- Nagaland: Nagaland Prohibition of Gambling, Prohibition, and Regulation of Online Games of Skills Act, 2015 regulates the online gambling laws there. It mostly prohibits online gambling that is solely based on luck. However, it gives licenses to those games which are based on skill. It also allows those corporates who are licensed by the Nagaland government to practice online gambling in other states as well, provided that other states have not banned any of such games.
- Sikkim: Sikkim Online Gaming Regulation Act, 2008 regulates gambling activities in Sikkim. It is one of the leading states in India that have legalized most online gambling activities. They have also given licenses to online casinos. However, as it is State legislation it is only applicable to its state and not wholly over India. As Sikkim is not a large State, it is not gaining a profitable market in the field of online gambling.
- Goa: Goa is popularly known for its offline gambling activities. But the online gambling activities are still not expressly legalized by any law. It is said that some online gambling takes place but most of them are still illegal in Goa.
- Telangana, Andhra Pradesh, Tamil Nadu: These three states have expressly prohibited online gambling activities in their States.
- Kerala: Kerala Gaming Act, 1960 regulates all the gambling activities in Kerala. Some of the online gambling activities like online casinos are permitted.
- West Bengal: West Bengal has been quite liberal regarding gambling laws. It is the only State that allows card games. Online gambling activities are also prevalent here as there is no such law that expressly prohibits it. West Bengal Gambling and Prize Distribution Act, 1957 regulate gambling activities.
- Uttar Pradesh: Uttar Pradesh is most likely to scrap the Public gambling Act, and introduce its laws in the State to regulate over all the gambling activities there. All sorts of betting including online gambling are strictly prohibited here.
- Rajasthan: Rajasthan Public Gambling Ordinance, 1949 regulates all gambling activities there. All sorts of betting including online betting are strictly prohibited.
As we know online gambling takes place over the Internet and gambling involves monetary transactions. In India, a lot of e-wallet sites need to be licensed by the Reserve Bank of India to permit any sort of transactions that take place in online gambling. This is regulated by the Payment and Settlement Act, 2007.
Lack of certain laws a reason for the fall of a promising industry
Online Gambling is a promising industry because a huge amount of revenue can be earned from it. This will not only enhance growth in online gambling corporate industries but also in the whole online business revenue system. However, it believes that this industry is very hard to establish in Indian society. More than 70% of the online gambling industry start-up fails at a very tender level. Several reasons lead to the failure of the online gambling industry. The first and the foremost reason being the lack of any unified and specific law regarding online gambling in India. Different states have formulated different laws regarding gambling. Most of the states have not expressly addressed any laws regarding online gambling. This has led to a lot of confusion among the online gambling industry. As we know, according to the Supreme Court of India games of skill are exempted from the purview of gambling. However, legislation on gambling is a state subject and many states have also banned games of skill as well. Even most of the States have not expressly defined the games of skill and games of chance. Due to the said reasons, the online gambling industry remains in apprehension to introduce any new apps in the market. Even due to the lack of any proper definition or characteristics that are required to make a game identified as a game of skill, a lot of apps are being banned or not released in the market.
Another important factor that is leading to the decline of this industry is that online gambling corporations are unable to access the wants and needs of the Indian audience. Most of the online gambling industry tries to copy the westernized way of marketing. This does not attract a huge section of the Indian audience. They have to understand the audience’s needs and bring that into their games and marketing nature.
Ways to deal with the problem
There are certain ways in which this online gambling industry can be extricated:
- Each State should make proper laws especially dedicated to the online gambling industry.
- The laws should be very expressive and distinct.
- It should properly define the terms and indicate the requirements of what is legal and what is not.
The industry of online gambling especially games of skill, has to improve its technology and make it much easier so that it becomes accessible to a lot more users. It has to understand the needs of the customer and design accordingly. As many online gambling apps are banned they have to be designed in such a way that it gets approval of the government. While making such apps, the industry needs to abide by the law and make it accordingly.
We have to also understand that many online gambling activities are banned, yet they are prevalent. Some of them are harmful to people and can cause a lot of monetary loss. More strict laws should be created to prevent illegal gambling. Laws can be also made on the limitation of the amount of money one can use in a day for such activities(if it is legal) so that huge money loss can be prevented.
Online Gambling can be an addiction if it is not taken under control. It can become very harmful to people. It is often observed that in this type of activity the young aged group easily gets involved and eventually destroys their future. The excitement of getting cash on playing any game or betting can be very intriguing. It might lead even the middle-aged group to forget about their responsibilities. Often people involved in gambling are seen to be involved in drugs and other immoral activities. It also leads to a disruption in mental peace. However, online gambling can become a beneficial industry. It has been observed as one of the most recreational online games. Lastly, the government has to put an eye on online gambling activities and make laws accordingly.
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