There are no specific laws dedicated to online gaming, online fantasy sports, online poker, etc. In India which makes it difficult for the gaming enthusiasts to indulge into the uncertain world of online gaming. The Supreme Court rejected a petition related to the legality of online poker, online rummy and online card games in India. In India, the online gaming law is at a very nascent stage and is being administered by the available, if any, local laws. The online gaming involving stakes is neither per se prohibited in India.
Online gambling laws in India are vague and open to
interpretation. Ask 50 different people about the legality of
betting in India and you’ll get 50 different answers. On this
page, we’ll attempt to give you a thorough but concise overview
of the current legal situation.
- Cricket Association of Bihar, (2014) 7 SCC 383 the Supreme Court made a reference to the Law Commission to examine the issue of legalisation of betting. The Commission in this report has discussed the history of betting and gambling, as in from when and where the concepts of betting and gambling could be traced in India.
- If there are no clear rules or laws for online gambling, it’s best to assume that it’s illegal in India. Look at what happened with cryptocurrencies. Only because RBI (not the govt.) banned cryptocurrencies, the larger audience including law enfor.
- Sikkim’s Online Gaming (Regulation) Act, 2008, made it the first state in India to legalise online gaming and betting. This law regulates games like roulette, blackjack and poker, and sports betting on games like football and cricket, conducted online.
Gambling is regulated in India at the national and state
levels. On the national stage, gambling is mostly addressed by
two or three acts depending on who you ask:
- The Public Gambling Act of 1867
- Prize Competition Act, 1955
- The Information Technology Act of 2000 (maybe)
Online gambling isn’t specifically mentioned in any of these
acts so it resides in a grey area of the law. Some could argue
that the Public Gambling act of 1867 applies to online gambling
since it restricts all forms of “gambling.” Additionally,
there’s the problem that “gambling” itself is never defined by
the act.
The states also have the authority to regulate gambling to a
degree. Two states, Goa and Sikkim, have authorized a limited
number of brick-and-mortar casinos. The other states outlaw most
forms of gambling, betting, and poker. The one nationwide
exception is horse racing betting, which the Supreme Court ruled
was a game of skill in 1996.
Although most forms of real-world gambling are banned in
India, there are no legal means for prosecuting those who choose
to place their bets online. For that reason, India is a
fast-growing market for online gambling. With 1.2 billion
inhabitants and a growing middle class, India shows great
potential for e-gaming operators.
Offshore betting sites such as Bet365 have already entered
the market and cater to Indians. At Bet365, you may deposit with
Indian rupees and are welcomed to register and play all games
from India. Bet365 resides outside of India and is therefore
safe from the laws that ban the operation of gambling websites.
And since there are no laws that prohibit individual people from
placing bets online, Bet365 is able to take advantage of the
legal loophole.
The Public Gambling Act of 1867
The Public Gambling Act of 1867 made it illegal to run a
gaming house or be found in one. The act describes a gaming
house as “any house, walled enclosure, room or place, playing or
gaming with cards, dice, counters, money or other instruments of
gaming or is found there present for the purpose of gaming,
whether playing for any money, wager, stake or otherwise.” The
penalty for being caught in one is up to a month in jail.
This act predates the internet by well over a hundred years
so there’s a good deal of debate as to whether or not it applies
to online gambling. Does a website count as a “place” where
instruments of gaming are present? It depends on who you ask.
Further complicating matters, an amendment in 1976 added the
following text:
or place” wherever they occur, the words “house, room, tent,
enclosure, space, vehicle, vessel or place” shall be
substituted.”
The question remains: does the internet count as a “vehicle,
vessel or place?” The 1976 amendment also predates the internet,
but it could be interpreted as applying to the internet.
Additionally, there’s no ironclad definition of the word
“gambling.” The closest the Public Gambling Act of 1867 comes to
defining “gambling” is in section 12:
provisions of this Act contained shall be held to apply to any
game of mere skill wherever played.”
Prize Competition Act, 1955
The Prize Competition Act, 1955 seems to address a very
specific type of gambling, but it has been interpreted as
applying to all forms of gaming in which a prize is awarded. In
short, the act bans prize competitions in which the prizes
exceed a thousand rupees a month.
The act defines “prize competition” with the following text:
cross- word prize competition, a missing- word prize
competition, a picture prize competition or by any other name)
in which prizes are offered for the solution of any puzzle based
upon the building up, arrangement, combination, or permutation
of letters, words, or figures.”
The Information Technology Act of 2000
The Information Technology Act of 2000 is even more difficult
than the other two acts described above, because it’s so broad
in scope. This act still causes a great deal of controversy
today due to its vague wording and harsh punishments for a wide
range of infractions.
Like the other two acts on this page, the Information
Technology Act doesn’t specifically mention online gambling.
However, the following text could be interpreted to apply to
internet wagering. No internet betting cases have yet to be
tried under the act, so we don’t yet know if it applies to
gambling or not. We will have to wait and see.
The most controversial portion of the act is also the part
that may or may not apply to online gambling:
any information through an electronic message that is grossly
offensive or has menacing character and might cause insult,
injury, criminal intimidation, enmity, hatred, or ill will, etc.
or sending such mail intended to deceive or to mislead the
addressee or recipient about the origin of such messages”
A violation of this portion of the act may result in
imprisonment for up to three years and an unspecified crime. The
Bombay High Court has already ruled that this act can be applied
to content published on websites.
Could online gambling be considered a message that may cause
insult, injury, or ill will? Does it fall under the comically vague
“etc.”? We don’t know. So far, we have yet to read about anyone
being charged with placing bets under the law.
What This All Means
In summary, gambling laws in India are confusing, poorly
written, and haphazardly enforced. The reality of it all for
online gambling specifically is that people across India bet
online every day. There are no laws that criminalize the mere
act of placing a few bets online. If you live in India, you have
access to a wide range of internet casinos, sportsbooks, and
poker rooms.
There’s no reason to limit yourself from enjoying the
excitement and convenience provided by gaming websites. In most
locations, betting over the internet is safer than doing it in
person. Millions of Indians already gamble online and have had
no legal issues to date.
The one bit of caution we would recommend is to look into the
laws in your area. Indian gaming law makes little sense and is
enforced at random. You should always check with the local
authorities before you place real money bets anywhere.
Online Gaming/Gambling laws in India prohibit betting or wagering and any act which is intended to aid or facilitate the same. Gaming/Gambling being a State subject, gaming/gambling in India have laws which differ from state to state . This would mean what is permitted in one State may be an offence in another. The Public Gambling Act, 1867, is the central enactment on the subject, which has been adopted by certain states of India like Uttar Pradesh, Punjab, Madhya Pradesh etc. The other States have enacted their own legislation to regulate gaming / gambling in India activities within its territory. It is to be noted that State Legislations have been enacted prior to the advent of virtual / online gambling in India and therefore references of gaming/gambling in India, in respective state legislatures are in relation to physical premises only, barring Sikkim and Nagaland which are the only States who have introduced regulations pertaining the online gaming.
After going through the State gambling laws for online gambling in India, it is found that, except the State of Orissa and Assam, most of the States have excluded ‘games of skill’ from applicability of its respective gaming/gambling laws. Further, playing certain games including ‘Poker’, both online and offline, is permitted under the laws of West Bengal, Nagaland and Sikkim subject to licence from the appropriate State Authorities. But this would be applicable only in the territorial limits of the respective State. In Goa, gambling is permitted only in Government permitted places operated as casinos.
The issue of online gambling in India laws in India still remains a grey area which is yet to be adjudicated by Courts of India. Having said that, necessary inferences can be drawn from orders passed by the Court while deciding the issue of whether a particular game is a ‘game of skill’ or a ‘game of chance’. But the issue of whether a ‘game of chance’, if played like a sport without stakes amount to gambling or not? still remains largely undecided.
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 has indicated that if there is gambling or if the gambling house is making profit from the game of rummy, then it could amount to an offense under the laws of AP. It was further observed by 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.
India Gambling Online Laws
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 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 Gujrat 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 therefore amounts to gambling under 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 teenpatti’ which has been observed by 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 on the cards received by them and the final outcome is based on 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 on the ability of a player to spend money and how deep are his pockets. It is a game of deceiving, bluffing and duping other players;
- The game of Rummy is different than 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 impact of gambling on the moral fibre of society noted that ‘one must not overlook the ground realities in India or the country like India, where the majority of the population is struggling for the basic necessity and there is lack of awareness amongst the people and if they are permitted by betting in the craze of easy money, they 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 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.
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 at para 60 of the said order makes a presumption that wagering or betting is an inseparable part of the game of poker and therefore would involve stake. 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 stakes remains a grey area which is then left at the discretion of police authorities.
POSITION:
Though the issue of Poker was considered by Gujarat High Court in view of the provisions of Gujarat Prevention of Gambling Act, 1887, in arriving at the decision of Poker being a ‘game of chance’, the court made several observations like how the game is played, origin of the game, reference to ancient Indian literature, moral and religious grounds, etc. which may be applied by other states/state machinery having similar gambling laws. The issue is likely to be clarified by Division Bench of 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, would constitute gambling under the respective state laws with exception 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 gaming/gambling under the state gambling laws. It is pertinent to note however that if online gaming is illegal in any State, the promotion of the same in such State would amount to violation of ASCI Code as well as Cable TV Network Regulation Act, 1994.
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