1. Why Is Gambling Illegal In India Right Now
2. Why Is Gambling Illegal In India Now
3. Why Is Gambling Illegal In India Today
4. Is Gambling Illegal In Indiana

The Public Gaming Act made it illegal to operate a venue where gambling took place. It also made it illegal to visit such a venue. While this is clear enough, there’s no precise definition of gambling within the act which makes it hard to determine, for example, whether betting on a game of cricket is illegal online in the same way as betting on the roll of a dice might be. Gambling Legal or Illegal in India The casinos or gambling is illegal in India at large. A lot of Indian illegal gaming depends on sports gambling. A lot of money is wagered illegally on IPL matches or any cricket matches.

Before entering into the question of online betting or gambling, let us examine whether ‘gambling or betting’ per se is legal or illegal in India. There are no central laws against gambling or betting in India. The Public Gambling Act, 1867 does not prohibit gambling or betting, it merely prohibits and prescribes punishment Act to provide for the ‘punishment of public gambling’ and the ‘keeping of common gaming-houses’.

As per the Act, “Common gaming-house” means any house, walled enclosure, room or place in which cards, dice, tables or other instruments of gaming are kept or used for the profit or gain of the person owning, occupying, using or keeping such house, enclosure, room or place, whether by way of charge for the use of the instruments of gaming, or of the house, enclosure, room or place, or otherwise howsoever.

Thus, what is prohibited is “owning common gaming houses”. Further, a person found in such common gaming houses “playing or gaming” or is found there present for the purpose of gaming shall be liable to fine.

Can we say that online betting or gambling website or application is a “common gaming house.” When the Act was legislated in 1867, there was no internet or website. However, if we see the definition of common-gaming house, it includes a “place” in which instruments are kept for gaming. Meaning of place cannot be confined to “physical space only”, a place on web space is also a place, and therefore owning a website or application which offers gaming services “for gain” is prohibited under the Public Gambling Act.

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Gaming:

The term “Gaming” was explained by Supreme Court in M.J. Sivani v. State of Karnataka, [(1995) 6 SCC 289],

“The elements of gaming are the presence of prizes or consideration, chance and prizes are reward and games include a contrivance which has for its object to furnish sport, recreation or amusement. Amusement would mean diversion, pastime or enjoyment or a pleasurable occupation of the senses, or that which furnished it. A common gaming house is a place or public place kept or used for playing therein any game of chance, or any mixed game of chance and skill, in which the organiser keeps one or more of the players. It is also a place in which any game is played, the chances of which are not favourable alike to all the players. Gaming is to play any game whether of skill or chance for money or money’s worth and the act is not less gaming because the game played is not in itself unlawful and whether it involved or did not involve skill.”

What is a Game of Skill:

Section 12 of the Public Gambling Act provides that Nothing in the foregoing provisions shall be held to apply to any “game of mere skill” wherever played. So, what is “game of skill”. A game of skill is a game where the outcome is determined mainly by mental or physical skill, rather than chance. Alternatively, a game of chance is one where its outcome is strongly influenced by some randomizing device, such as dice, spinning tops, playing cards, roulette wheels, or numbered balls drawn from a container. While a game of chance may have some skill element to it, chance generally plays a greater role in determining its outcome. A game of skill may also may have elements of chance, but skill plays a greater role in determining its outcome.

Whether a game is of chance or skill is a question of fact to be decided on the basis of facts and circumstances of each case. The Indian courts have recognised that no game is a game of pure skill alone and almost all games involve an element, albeit infinitesimal, of chance. The Hon’ble Supreme Court of India has interpreted the words “mere skill” to include games which are preponderantly of skill and even if there is an element of chance, if a game is preponderantly a game of skill, it would nevertheless be a game of “mere skill”.

What is Gambling:

Supreme Court observed in K.R. Lakshmanan (Dr) v. State of T.N., [(1996) 2 SCC 226],

“The New Encyclopaedia Britannica defines gambling as “the betting or staking of something of value, with consciousness of risk and hope of gain on the outcome of a game, a contest, or an uncertain event the result of which may be determined by chance or accident or have an unexpected result by reason of the better’s miscalculations”. According to Black’s Law Dictionary (6th Edn.) “Gambling involves, not only chance, but a hope of gaining something beyond the amount played. Gambling consists of consideration, an element of chance and a reward”. Gambling in a nutshell is payment of a price for a chance to win a prize. Games may be of chance or of skill or of skill and chance combined. A game of chance is determined entirely or in part by lot or mere luck. The throw of the dice, the turning of the wheel, the shuffling of the cards, are all modes of chance. In these games the result is wholly uncertain and doubtful. No human mind knows or can know what it will be until the dice is thrown, the wheel stops its revolution or the dealer has dealt with the cards. A game of skill, on the other hand — although the element of chance necessarily cannot be entirely eliminated — is one in which success depends principally upon the superior knowledge, training, attention, experience and adroitness of the player. Golf, chess and even rummy are considered to be games of skill. The courts have reasoned that there are few games, if any, which consist purely of chance or skill, and as such a game of chance is one in which the element of chance predominates over the element of skill, and a game of skill is one in which the element of skill predominates over the element of chance. It is the dominant element — ‘skill’ or ‘chance’ — which determines the character of the game.”

Supreme Court laid down the principle in Satyanarayana case [(1968) 2 SCR 387 : AIR 1968 SC 825 : 1968 Cri LJ 1009], that (i) the competitions where success depends on substantial degree of skill are not ‘gambling’ and (ii) despite there being an element of chance if a game is preponderantly a game of skill it would nevertheless be a game of “mere skill”. We, therefore, hold that the expression “mere skill” would mean substantial degree or preponderance of skill.

The law laid down by Supreme Court in the State of Bombay v. Chamarbaugwala [AIR 1957 SC 699] and [AIR 1957 SC 628], wherein it has been authoritatively held that a competition which substantially depends on skill is not gambling. Gaming is the act or practice of gambling on a game of chance. It is staking on chance where chance is the controlling factor. ‘Gaming’ in the two Acts would, therefore, mean wagering or betting on games of chance. It would not include games of skill like horse-racing. In any case, Section 49 of the Police Act and Section 11 of the Gaming Act specifically save the games of mere skill from the penal provisions of the two Acts. We, therefore, hold that wagering or betting on horse-racing — a game of skill — does not come within the definition of ‘gaming’ under the two Acts.

From the above following proposition emerges;

(i) Betting or gambling is not illegal or prohibited in India.

(ii) What is illegal is running or maintaining “common gaming houses for gains”.

(iii) None of the prohibitions apply if the game is a “game of mere skill”.

Element of Chance and Hope:

There is nothing in this life that does not depend upon chance, at least to some extent. The government makes a policy, and there are elements of chance whether the policy will succeed or not- is the policy-making a game of chance? An art dealer buys a work of art in the hope that prices of that work of art will increase in the future- is it a game of chance? People elect a government in the hope of good governance which may or not materializes- is it a game of chance? If we start seeing life in this light, there is nothing in life that is not a game of chance. If an effort or wish to gain money on chance is gambling- life is a gamble.

What is learning? What is knowledge? Learning or knowledge is nothing but acquiring skills, temperaments and information so that the “element of chance” in every game improves in one’s favour. So why do policy makers learn economics- so that they can make a policy which has a better chance of performing. Why should judges learn law- so that probability of justice increases in judgments.

Usefulness or uselessness of an activity has no meaning. A person may spend years in leaning the nuances of art or poetry or cricket, but on a crude level the activities may not be useful. A game of skill is when a player invests his/her time in learning, practising and refining his skill to perform in a particular game. The Supreme Court noted that games of skill would be where “success depends principally upon the superior knowledge, training, attention, experience and adroitness of the player. It is also noted by the Supreme Court that a Game of Skill will have a predominance of Skill Factor.

The Supreme Court in the case of K.R. Lakshmanan Vs. State of Tamil Nadu [AIR 1996 SC 1153] while deciding whether a “horse-race run on the turf of the club” is a game of chance or a game of “mere skill”? It held that the “horse-racing is a game where the winning depends substantially and preponderantly on skill”. The Court also said that “we have no hesitation in reaching the conclusion that the horse-racing is a sport which primarily depends on the special ability acquired by training. It is the speed and stamina of the horse, acquired by training, which matters. Jockeys are experts in the art of riding. Between two equally fast horses, a better trained jockey can touch the winning-post.

Another example is that of Rummy wherein the Supreme Court in State of Andhra Pradesh v. K. Satyanarayana [(1968) 2 SCR 387] concluded that “Rummy, on the other hand, requires certain amount of skill because the fall of the cards has to be memorised and the building up of Rummy requires considerable skill in holding and discarding cards. We cannot, therefore, say that the game of Rummy is a game of entire chance. It is mainly and preponderantly a game of skill”.

Betting and Gambling- A state subject:

In 1950 the constitution of India was introduced. In the constitution, it is written that states are allowed to formulate their own gambling laws. “Gambling and betting” have been mentioned in list-II of the seventh schedule of the Constitution, and therefore states are empowered to legislate laws on it. This means that each state in India has it’s own “betting and gambling” laws, and hence even the online “betting and gambling” will depends upon those laws.

Thus, in the state of Maharashtra, games of skill are allowed while games of luck are prohibited. The same is true for Karnataka and many other states. The state of Goa has allowed gambling by enacting the Goa, Daman and Diu Public Gambling Act, 1976. The Goa, Daman and Diu Public Gambling Act, 1976 was amended to allow card-rooms in offshore vessels and slot machines in five-star hotels. The Sikkim Regulation of Gambling (Amendment) 2005 authorises the State government to notify the specified areas where permission can be granted for running of casinos on payment of a specified fee.

The state of Nagaland has enacted the Nagaland Prohibition of Gaming and Promotion and Regulation of Online Games of Skill Act, 2016. The said Act provides for regulation and promotion of “games of skill” through the issuance of licenses. This Act provides that the license holders under the same can operate from any State in India where gambling is allowed. The state of Sikkim has framed legislation regulating the virtual or online gaming activities within its territory through Sikkim Online Gaming (Regulation) Act, 2008.

Recently the State of Tamilnadu, amended the Tamilnadu Gaming Act, 1930 by inserting Section 3A, which states that, “No person shall wager or bet in cyberspace using computers, computer system, computer network, computer resource, any communication device or any other instrument of gaming by playing rummy, poker or any other game.” The ordinance inserts the word cyber cafe under the Act as well as electronic record, computers, computer system, computer network, computer resource or any communication device under the amendment.

Conclusion:

Betting and gambling are state subjects, and states are duly empowered to regulate “betting and gambling”. The regulations may be in the form of licensing or even prohibition. As different states legislate different laws, uncertainty is likely to continue in the area. Though uncertainty in laws is a great tyranny, “uncertainty” in laws cannot be eliminated just like in any other areas of life. To that extent, even law making is a “game of chance” with the element of hope that newly enacted laws will work and do good.

[Views expressed are personal views of the author. The author may be contacted on office@rklegal.org]

The Public Gaming Act made it illegal to operate a venue where gambling took place. It also made it illegal to visit such a venue. While this is clear enough, there’s no precise definition of gambling within the act which makes it hard to determine, for example, whether betting on a game of cricket is illegal online in the same way as betting on the roll of a dice might be. We have further examined the laws pertaining to online gambling below in order to ascertain its legality and if investments can be made within the same or not.

Online Gambling Legislations:

The Public Gaming Act of 1867 makes no reference to online gambling. This is no surprise, given that the internet was a long way from being invented when it was introduced. It can be ascertained that a gambling website in India is deemed illegal under the terms of this act, given its wording.

There’s also another act which could be considered to relate to online betting and gaming: The Information Technology Act of 2000. This makes provisions for various offences relating to online activity. Even though investments in online gambling is profusely prohibited by foreign investors, it does give the Indian government the power to block any foreign websites.

The government has used this power to instruct Internet Service Providers to prevent Indian residents from accessing certain foreign betting and gaming sites. On a state level, there are two states which have introduced legislations relating specifically to online gambling. In Maharashtra, it’s completely prohibited, while in Sikkim the government has now provided the authority to issue licenses to operators wishing to provide online gambling services within the state and under the guidance of the law. This is a notable step forward for regulated gambling in India, provided it is strictly in adherence to the specific law mentioned above.

How Online Gambling Laws can affect us:-

In every sense of the way, the legal situation relating to the usage of online gambling sites in India is decidedly complicated but can be made clear through an analysis. Many of the major gambling sites welcome Indian customers readily, but since these sites are operated overseas they aren’t governed by Indian law and can be deemed as illegal under the present law, if found in contradiction to any provisions relating to the same.

With that being said, with the exception of Maharashtra, there are no such laws which clearly state that it is illegal for an Indian resident to gamble online. Even though gonline gambling may be banned in most parts of the country, if one wishes to indulge in this activity one may only do so through a site which is reputable and trustworthy and which accepts Indian customers and complies with the state governed laws with regards to gambling.

The Foreign Exchange Management Act (FEMA) 1999 was introduced within India in 1999 in order to govern the exchange of foreign currencies. Technically, depositing to a gambling site in a currency other than rupees could be considered an exchange of foreign currencies and thus be covered by the act however, no direct provision for the same has been made clearly available till date.

This is why many Indians find it difficult to deposit at sites from their bank or by using a credit card.

Changes within the Indian Online Gambling Legislation:-

It’s not unreasonable to expect that in the coming years, the gambling legislation in India will be updated and amended in order to provide a clearer idea of what’s illegal and what’s not however, the latest changes, if any have been elaborated below:-

October, 2014

The Sikkim state government issues its first license for an online gambling operator; Future Gaming Solutions Private Limited. Future Gaming will now be able to legally offer real money for online betting and gaming services within the state.

LEGAL POSITION OF ONLINE GAMBLING IN INDIA

Game of Skill v. Game of Chance:

There has been a substantial discussion by Supreme Court and High Court on what constitutes a ‘game of skill’ and a ‘game of chance’. What is adduced from the judgments is that a game where there is preponderance of skill over chance is a ‘game of skill’ and vice-versa.

By taking the above ratio into account, SC in the matter of State of AP v. K.Satyanarayana(1968) held the game of Rummy to be a ‘game of skill’. However, the Court in its judgment had indicated that if there is gambling or if the gambling house is making any profit whatsoever from the game of rummy, then it could amount to an offense under the laws of AP. It was further observed by the SC that the three card game which goes under different names such as flush, brag, etc. is a game of pure chance. This was relied upon by SC in another its other judgments viz. M.J.Sivani v. State of Karnataka (1995) and Dr. K.R. Lakshmanan vs State Of Tamil Nadu And Anr (1996).

The issue of whether rummy if played with stakes amounts to gambling or not has not been decided by Supreme Court. However, Andra Pradesh High Court in D. Krishna Kumar And Anr. vs State Of A.P.(2002) (Annexure-2) relying upon the SC decision of 1968 held that till such time the state gambling Act is amended to lay down that playing Rummy with stakes is 'gaming', playing Rummy with stakes is not 'gaming' within the meaning of the Act and is therefore allowed.
Delhi District Court: Gaussian Network Pvt. Ltd. Vs. Monica Lakhanpal

The issue of Online Gaming/gambling laws in India was discussed in detailed in the above case when the issue was put up before the Court under Order 36 Rule(1) of CPC by the parties. The Court held the following:

• Game of skills, if played with stakes does not amount to gambling;
• Playing games of skill for money is only legal in the real form, online games cannot be compared to real games;
• Attracting business or enticing players by alluring them with prize money is illegal;
• Gaming sites partaking a slice on the winning hand are illegal as they amount to a virtual gambling house.
  

Having said that, the said ruling was rendered infructuous as during the final arguments in the revision petition, parties sought to withdraw the petition. So the effect being there is no ruling which can be treated as a precedent as regards online gambling.
Gujarat High Court on Poker:

The issue of whether Poker is a ‘game of skill’ or a ‘game of chance’ was never discussed in detail by any Court in India until the recent decision/order dated December 4, 2017 passed by the Gujarat High Court in, “Dominance Games Pvt. Ltd. V. State of Gujarat”, wherein, the said issue was extensively pondered upon. The Court in its said decision held that poker is a ‘game of chance’ and hence amounts to gambling under the Gujarat Prevention of Gambling Act, 1887. While arriving at the aforesaid decision, the Court inter alia observed the following:

• That the game of poker originated from ‘flush’ or ‘Indian teen Patti’ which has been observed by the SC as a game of chance in its 1968 judgment and consequently, as a corollary, the game of poker is also to be construed as a game of chance;
• The game of poker involves a process wherein the players have no control or say over the cards received by them and the final outcome is based upon mere luck or chance depending upon how the cards are received by the player. Poker-face to bet, would be a part of bluffing or deception and the so-called strategy, cannot be considered as a skill. The outcome also depends upon the ability of a player to spend money and how deep his pockets are. It is a game of deceiving, bluffing and duping other players;
• The game of Rummy is different from the game of Poker. While poker involves betting or wagering, rummy has nothing to do with stakes and betting or wagering is not essential to the game of rummy;
• The Court while noting the ills of gambling and the impact of gambling on the moral fibre of society noted that ‘one must not overlook the ground realities in India or a country like India, where the majority of the population is struggling for the basic necessity and there is a lack of awareness amongst the people as to, if they are permitted to bet at all, in the craze of earning easy money and hence do not know what to do if the things go wrong.’
  

Mr. K.N Suresh, Secretary of Indian Poker Association has filed an appeal against the said order, being Letters Patent Appeal No. 2625 of 2017 before the Division Bench of Gujarat High Court. The bench after hearing the matter briefly on December 28, 2017 issued a notice to the state government and other respondents and till date the matter is not heard finally. Having said that, since no ad-interim/interim reliefs are granted presently, the Single Judge order stands valid and enforceable.

Why Is Gambling Illegal In India Right Now

Though the order does not specifically make any observation on Poker, if played as a sport and/or without stakes, however, while differentiating between rummy and poker, the Hon’ble Court makes a presumption that wagering or betting is an inseparable part of the game of poker and therefore would involve stakes higher than imagined. The Court while holding poker to be a ‘game of chance’ has also predominantly relied upon moral religious and social grounds. In the absence of the said order being overruled and the issue being addressed specifically, the game of poker, even if played as a sport and/or without any stakes, remains a grey area which is then left at the discretion of police authorities.

POSITION:

Though the issue of poker was considered by the Gujarat High Court in view of the provisions of the Gujarat Prevention of Gambling Act, 1887, in arriving at the decision of poker being a ‘game of chance’, the court made several observations as to how the game is played, the origin of the game, reference to ancient Indian literature, moral and religious grounds, etc. which may be applied by other states/state machineries having similar gambling laws. The issue is likely to be clarified by the Division Bench of the Gujarat High Court, once the appeal is finally heard.

In view of the above, it is clear that if a game is considered to be a ‘game of chance’ under the state laws and rulings by the Courts and is played with stakes, it would constitute as gambling under the respective state laws with exceptions pertaining to a few states as mentioned above. If an entity is able to show that a particular online game or a particular on-ground gaming activity has preponderance of skill over chance and/or is played as a sport without stakes, it may fall within the exception of gambling under the state gambling laws. It is pertinent to note however that if online gambling is illegal in any state, the promotion of the same in such a state would amount to violation of ASCI Code as well as Cable TV Network Regulation Act, 1994.

Why Is Gambling Illegal In India Now

FDI and Online Gambling in India:

The law in India very strictly and straight forwardly bans Foreign Direct Investment in the gambling sector in India. There has been a clear and consistent policy decision that no foreign investment is allowed in Indian gambling businesses. No foreign company or subsidiary of such a company can directly or in joint venture with Indian companies participate in legal gambling businesses in India. Even foreign holding of securities is not allowed in an Indian venture, even if such shareholding is minority or marginal.

Taking capital in the form of debt from foreign investors is also not an option since Indian entities must toe the lines drawn by External Commercial Borrowings (ECB) Guidelines. Automatic route under the current ECB rules do not allow borrowing for the gambling sector

Why Is Gambling Illegal In India Today

FDI is prohibited in the following activities/sectors:

Is Gambling Illegal In Indiana

(a) Retail Trading (except single brand product retailing)
(b) Atomic Energy
(c) Lottery Business including Government /private lottery, online lotteries,etc.
(d) Gambling and Betting including casinos etc.
(e) Business of chit fund
(f) Nidhi company
(g) Trading in Transferable Development Rights (TDRs)
(h) Real Estate Business or Construction of Farm Houses
(i) Activities / sectors not opened to private sector investment.

Besides, foreign investment in any form, foreign technology collaboration in any form, including licensing for franchise, trademark, brand name, management contract etc., is also completely prohibited for Lottery Businesses and Gambling and Betting activities.