Legality Of Online Gambling In India

Key takeaways

• The Public Gambling Act of 1867 is the piece of legislation that regulates online gambling in India.
• An online gaming licence is required for the state of Sikkim and Nagaland, while Andhra Pradesh has a blanket ban on internet gambling, Tamil Nadu allows skill-based online gaming.
• There is no unifying law in India that specifies whether gambling is acceptable. Each state is given the authority to enact its own gaming regulations under Entry 34 of List II of the Seventh Schedule of the Indian Constitution.

Since the beginning of time, gambling has been practised in India. The idea of online betting and gambling has grown tremendously in popularity in India as a result of technological advancements and the development of the internet. Lotteries and online games are recent additions to the gaming and betting industry's primarily offline ecosystem. India has a significant legal challenge when it comes to gaming. The Public Gambling Act of 1867 is the piece of legislation that regulates this particular sector. The fact that it is more than 100 years old raises a lot of questions. The outdated legislation applied to the circumstances at the time and did not take into account changes in modern society. Although amendments were made, the problem of the obsolete laws was not resolved. Gambling is forbidden under schedule-I, according to FEMA, as of 1999. Here, the term "gambling" refers to the selection of winners by a lottery or luck by chance; when luck by chance occurs, gambling is taking place.

Being the owner of a venue where gambling takes place is forbidden by the Public Gaming Act. Additionally, it is unlawful for anybody to enter such a venue. There isn't a clear definition of what constitutes gambling, though. You cannot determine if betting on a sporting event is prohibited.

The detailed description of gambling and what it entails are absent from the Indian Constitution. Although a constitutional amendment is required, the concerned Legislators do not view gambling as a top priority.

Governing Framework

There is no unifying law in India that specifies whether gambling is acceptable. Each state is given the authority to enact its own gaming regulations under Entry 34 of List II of the Seventh Schedule of the Indian Constitution. It implies that there are many state-specific variations. For instance, in West Bengal, rummy, bridge, and poker are not considered forms of gambling. An online gaming licence is required for the state of Sikkim and Nagaland. While Andhra Pradesh has a blanket ban on internet gambling, Tamil Nadu allows skill-based online gaming. Different attitudes and views have become more prevalent throughout the states as a result of the lack of consistency and clarity in the law relating to online betting and gambling.

What is the Game of Chance and Game of Skill

It is important to consider the competition while deciding between a game of chance and a game of skill. A game is deemed to be a Game of Chance, if the House, as with slot machines, is the opponent, it will be regarded as a Game of Skill. Nevertheless, if the player is competing against another player and the game requires the use of tactics like mathematics and statistics.

The Public Gambling Act, 1867

The Public Gambling Act is the most well-known of India's federal gambling legislation. The Act was created under India's colonial rule by the British. All gambling and betting activities, with the exception of horse racing, are prohibited under this Act. The Act outlaws the operation of gambling establishments in any type of home, apartment, or enclosed space. However, the law is over 150 years old, thus it is unclear how online betting would fall under this Act. The Act simply makes reference to physical betting being prohibited. Therefore, the issue of internet betting, which does not involve a physical location, continues to be ambiguous. These regulations mostly concentrate on conventional betting methods because they were created before the advent of modern online gaming.

Restrictions

• Placing a bet.
• Possessing a premise, building or enclosed area where gambling activities take place.
• Participating in any cash transfers used for betting.
• Placing any bet of any form of private property, roads or places without a valid license.

Anyone found in violation of this law faces a fine of Rs 200 or a sentence of up to 3 months in jail. A person who enters a gambling facility faces a fine of Rs 100 or up to one month in jail as a penalty. The Court ruled that horse racing is not a form of betting. Therefore, all horse racing-related activities are legal.

Games of Chance vs. Games of Skill

Most games have an unpredictably large amount of both skill and chance, but a game will only lean one way or the other. For instance, despite the fact that poker does involve some element of chance, it is still seen as a game of skill since the player may make decisions based on skill in relation to what other players are doing and the flop.

Fantasy Sports

The Indian Courts have given fantasy sports a lot of consistent consideration, in contrast to other internet games, and have approved them since they require upon skill. In contrast to the three-card game, Rummy Circle does not rely solely on chance for luck. Rummy required enough talent and intelligence to win. In light of this, it may be said that rummy is a game of skill rather than that of chance. Games like Rummy Circle, MPL, and Dream11 are not considered unlawful because their specific internet platforms are covered by the Information and Technology Act, which makes no mention of the legal status of online betting sites. Online gambling is therefore still seen as being lawful. The games provided by Dream11 are only based on skill and judgement, hence they fall beyond the definition of gambling, according to both Punjab and Haryana and the Bombay High Court.

Case law

State of Andhra Pradesh v K. Satyanarayana [AIR 1968 SC 825], the Court held: The game of Rummy isn’t a game entirely of chance just like the ‘three-card’ game mentioned within the Madras case to which we were referred. The ‘three card’ game which matches under different names such a ‘flush’, ‘brag’ etc. may be a game of pure chance. Rummy, on the opposite hand, requires a specific amount of skill because the autumn of the cards has got to be memorized and therefore the build-up of Rummy requires considerable skill in holding and discarding cards. We cannot, therefore, say that the sport of Rummy may be a game of entire chance. it’s mainly and preponderantly a game of skill. the prospect in Rummy is of an equivalent character because the chance during a deal at a game of bridge

ManamyilMandram v State of Tamil Nadu [AIR 2005 MAD 261], the Court held: Therefore, while it’s the proper of the appellant to possess recreational activities which aren’t prohibited, the respondent’s right to require appropriate proceedings against illegal games of betting, wagering, etc. is additionally provided for under the Act. Therefore, there can’t be a blanket direction as prayed for by the appellant. The question whether a specific game may be a game of skill or chance is to be selected the facts and circumstances of every case. As and when proceedings are; initiated against the appellant in accordance with law, the appellant shall always have the proper to question an equivalent or challenge the action of the respondents if it’s not in accordance with law.

Conclusion

Gambling is characterised in India as an activity where there is a chance of losing or winning money. The statute specifies that skill games are exempt from the laws. For instance, in India, state-level regulation of horse betting exists. Individuals are welcome to watch horse races and make bets at the accessible parlours. Another type of gambling that is permitted in India is lotteries. Despite not being skill-based games, they are nevertheless permitted. This demonstrates how the laws are in conflict. Lotteries are governed by a specific statute that specifies the maximum number of drawings each week. While the practise of online betting is still relatively new in India, the government has started to include it into its policies. In October 2014, Sikkim became the first state to grant Future Gaming Solutions a licence to operate a casino.