Introduction
Being the second most populus nation, India has an extremely big and lucrative market for casinos and betting, be it online or physical. the expanding use of digital technology, especially with the advent of Covid-19 pandemic, online betting and gambling have become commonplace. However, India does not have comprehensive laws to regulate gambling and betting on various sports. Therefore, most of the industry functions in a legal grey area.
Legality of Gambling
The general law which governs gambling is The Public Gambling Act, 1867 (“PGA”). However, this Act is not applicable to the entire country. Many states have adopted the PGA as it is, and few others have adopted it with a few changes. The PGA merely lays down broad regulatory principles and definitions. According to the Seventh Schedule of The Constitution of India, gambling and betting is prescribed in the State list and is a part of the legislative prerogative of the States.
The biggest lacuna of the PGA is that it is a colonial legislation which does not take into account the advancement of technology, more specifically the internet. The internet now provides a huge playground for people who are interested in gambling and betting. However, the PGA only regulates gambling and betting performed on physical premises, such as “gaming houses”.[1]
Except in the States of Goa[2], Sikkim[3] and Meghalaya[4], Indian laws and courts have been opposed to any game of chance and probability, despite the growing popularity of gambling and betting in India. Games involving chance and probability are gaining traction as income generation source among the public.
The state of Goa legalised and regulated gambling by enacting Goa, Daman and Diu Public Gambling Act, 1976. This Act allows people to establish card game facilities in offshore vessels and slot machines in five-star hotels. Anybody who wants to establish an institution for gambling in Goa has to take authorization from the government and pay the required fee. Similarly, the Sikkim government also offers legal gambling under Sikkim Regulation of Gambling (Amendment), 2005. As per the provisions of this Act, the government can specify certain areas where casinos can be constructed and put to function.
The state of Meghalaya has recently enacted the Meghalaya Regulation of Gaming Act, 2021 whereby it now allows operators to obtain a license to offer online and land-based games of chance.
This analysis puts into perspective that gambling in India is an extremely restricted activity, with little to no regulation. However, the Public Gambling Act, as well as laws of various states make a worthwhile distinction between “game of skill” and “game of chance”. A game of skill is generally left out of the purview of gambling legislations in India.
Game of Skill
A "game of skill" is mostly determined by a player's level of mental or physical proficiency rather than by chance. A game of skill offers players the freedom to test their athletic and/or intellectual prowess, which is one of its most important advantages. The participants are encouraged by these games to become acclimated to a certain set of rules while searching for methods to develop and use new techniques through regular practise. The results of these games are determined purely by individual skills.
Game of Chance
A game where the individual skill of a person does not matter, is a “game of chance”. In a game of chance, the result is primarily determined by a random factor which is out of the control of the player. In other words, the game is based on pure chance or a contingency.
Interpretation of Courts
Naturally, there are aspects of chance and elements of skill in any game. The main conclusion that must be reached in order to establish whether a game is a "game of chance" is that the factor of luck outweighs the portion of ability and skill.[5] In simple terms, a game of chance is one in which the result is decided by luck rather than ability.[6] The court in Manoranjithan Manamyil Mandram v. State of Tamil Nadu[7] held that the decision whether a game is of skill or chance depends on the individual facts of every case.
Judicial pronouncements in our country have declared many games as games of skill. This implies that such games are legal under the current framework. The Apex Court in State of Andhra Pradesh v. K. Satyanarayan[8] held that rummy is a game of skill it requires people to apply their minds and have a functioning knowledge of the game. Similarly, the Supreme Court in K.R. Lakshmanan v. State of Tamil Nadu (“K.R. Lakshmanan” )also held horse racing to be a game of skill as it involved knowing the intricacies of all the agents involved; such as the rules, the horse and the rider.[9] In the decision of Shri Varun Gumber vs. Union Territory of Chandigarh and Ors[10], the Punjab & Haryana High Court relied on the Hon’ble Supreme Court’s decision in K.R. Lakshmanan, held that the game offered by Fantasy Dream11 was based on skill and thus, did not qualify as gambling. An appeal was filed before the Hon’ble Supreme Court of India against the judgment passed by the High Court. However, the Supreme Court upheld the validity of the judgment and summarily dismissed the appeal. Several other courts have given a similar ruling.[11]
The Hon’ble Karnataka High Court in All India Gaming Federation vs. The State of Karnataka & Ors[12] observed thatplaying games and sports of skill is a facet of the right to freedom of speech and expression, as well as the right to life and personal liberty under Articles 19 (1) (a) and 21 of the Constitution, respectively.
Gambling in the internet era
Real money or stakes-based online gambling is permitted unless, it is not forbidden expressly by the concerned state government. Since the laws ofSikkim[13], Meghalaya[14], Nagaland[15], and the southern state of Telangana[16]specifically forbid playing online games with stakes or using real money, no one can engage in online gambling in those jurisdictions.
The Public Gaming Act and the Information Technology Act also do not deal with online gambling. Therefore, there is a dilemma on the legality of online gaming in India.
However, there have been developments in the area of online gambling in a few specific states. The state of Sikkim permits the offering of casino games such as roulette and blackjack by obtaining a license under the provisions of the Sikkim Online Gaming (Regulation) Act, 2008. This act places a mandatory condition that the games can only be offered via intranet terminals.
Virtual team selection games and virtual sport fantasy league games are explicitly recognised as games of skill by the Nagaland Prohibition of Gambling and Promotion and Regulation of Online Games of Skill Act, 2016. A license would be necessary if such games were to be offered online in the state of Nagaland.
Further, under the provisions of the Karnataka Police (Amendment) Bill 2021 both offering and participating in online gaming activities, including games of skill, is prohibited.
Conclusion
The legality of betting and gambling in India necessitates the revision of more consistent gambling regulations. In order to compete effectively, the government must establish a robust legislative framework. At present, gaming/ gambling legislations appear to be ambiguous and complex. They also differ from state to state. Though the courts have attempted to give clarity, however, legality of online gaming is subjective and depend on whether the game in question is a game of chance or skill. Therefore, it becomes very crucial to regulate this industry and make uniform regulations as the recent technological advancements have made it possible for a larger number of people to engage in these gaming activities.
[1] The Public Gambling Act, 1867 https://www.indiacode.nic.in/bitstream/123456789/2269/1/AAA1867____03.pdf [2] Goa, Daman and Diu Public Gambling Act, 1976 [3] Sikkim Online Gaming (Regulation) Act, 2008, Sikkim Regulation of Gambling (Amendment), 2005 [4] Meghalaya Regulation of Gaming Act, 2021 [5] Shri K.L. Mansukhani v. Senior Inspector of Police & Ors., 1999 SCC OnLine Bom 843 [6] Black’s Law Dictionary, 6th Edition (Page 679) [7] AIR 2005 Mad 261 [8] AIR 1968 SC 825 [9] (1996) 2 SCC 226 [10] [CWP No. 7559 of 2017] [11] Gurdeep Singh Sachar vs. Union of India, Criminal P.I.L. No. 16 of 2019, Bombay High Court; Chandresh Sankhla v. the State of Rajasthan, 2020 SCC Online Raj 264; Avinash Mehrotra v. State of Rajasthan & Ors., Special Leave Petition (Civil) Diary No(s). 18478/2020 [12] WP 18703/2021 [13] The Sikkim Online Gaming Regulation Act, 2008 [14] Meghalaya Regulation of Gaming Act, 2021 & Meghalaya Regulation of Gaming Rules, 2021 [15] The Nagaland Prohibition of Gambling and Promotion and Regulation of Online Games of Skill Act, 2015 [16] Telangana Gaming (Amendment) Act, 2017
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