Status of Gambling in India

Author: Sukriti Jaswal, Lovely Professional University, Phagwara

Gambling has been present in India for a long time and it includes, most often than not, the use of money. Gambling refers to staking or betting on something valuable in the hopes that they would get a profit in return. This staking or betting is made on a game or a particular event and the win or loss of the person depends upon the outcomes of the said game or event. These events are mostly not in the control of the person placing the bet and are dependent on fate, luck, or chance.

Gambling, not only in India but around the world, is one of the most entertaining games or options to pass their time. the game became popular because your money is at stake which increases the excitement as well as the adrenaline rush for the gamblers.

Though gambling has been a great pastime for individuals throughout the country and the world, gambling as a sport in India has always been considered as being associated with people with slew characters. Because of this reason, the British government imposed a carpet ban on all gambling houses.

When the Indian Constitution was formed after independence, the members of the constituent assembly allowed the states to form the laws related to gambling as they think fit and therefore put the topic in List II of Schedule VII which made it fall under the ‘state list’. Most of the states adopted the Public Gambling Act of 1976 with a few amendments.

With the coming of the internet and the easy availability of smartphones as well as fast internet everywhere, the new trend of online gaming came into the picture. This allowed the people to bet on games sitting at their homes and cheaper rates than those of the betting houses.

The pandemic era saw a surge in the number of people who turned to gambling and a surge in the number of apps and online sites that provided the opportunity of gambling while staying at home and lesser monetary risks than gambling houses. This time also saw an increase in the new trend of sports betting across the country.

Game of Chance or Game of Skill

Every game that is played and on which a bet is placed is categorized under two heads. The game is either a game of chance or a game of skill.

Games of chance are those games that are solely based on luck. These games are played randomly and one can play these games with or without prior knowledge or understanding of the game. Some of the examples of games of chance are the games involving picking a number or rolling a dice, etc. Such games of chance are considered to be illegal by Indian law.

Games of skill are those games that require a person to use some or other form of skill such as analytical skill, logical skill, decision making, etc. Prior knowledge and understanding of the game are important to play such a game. Such games of skill are considered to be legal by Indian law.

However, there is a lot of bias present in India related to gambling games.

·       Horse racing is considered to require certain skills and prior knowledge of the game and hence is considered to be legal in India.

·       Certain states such as Goa, Maharashtra, Nagaland, Sikkim, Meghalaya, Kerala, Arunachal Pradesh, and a few other states have legalized lotteries even though they are a game of chance.

·       Similar biases are present in the states by allowing certain forms of gambling and putting other forms of gambling illegal.

JUDICIAL PRONOUNCEMENTS

The Supreme Court has tried to close the gap between the laws governing gambling and has also tried to clarify the misunderstandings that are present among the people as to what comes under the ambit of gambling and what doesn’t.

In the case of State of Bombay v. R.M.D. Chamarbaugwala[1], the Supreme Court held that those games in which the success or failure depends on the skills of the person playing the game and not on chance do not fall under the meaning of gambling. The SC in this case made a clear distinction between what is a game of chance and a game of skill. In the case of Dr. K.R. Lakshmanan v. State of Tamil Nadu[2], the Supreme Court held that the games which are said to be games whose result depends merely on skill have been interpreted to mean the games that are mainly and predominantly games of skills.

Even though the Supreme Court has given judgments that have specified as to which games fall under the games of skill and which games fall under games of chance, certain states have given contrary judgments according to the laws concerning the state. The High Court of Gujarat held that the game of Texas Hold’em Poker fell under the meaning of gambling and was not a game of skill. It also held that since each state had a right to form laws for gambling in the state as it fell under the state list, the state had a right to decide which games fell under gambling and which didn’t[3].

SPORTS BETTING

Sports betting is one of the most common forms of betting in India. It is not only a source of entertainment but also a means of passing time with minimum resources at stake. To add to this, placing a bet on sporting events makes the match even more exciting.

Betting on games of skill is legal in India, however, there is a vague line as to which sport is considered to be requiring skill to bet and which doesn’t. Currently, only Horse race betting is said to require skill in the sphere of sports betting and no other game falls under this category making horse racing the sole sport on which betting is allowed.

India is the largest country that watches the sport of cricket and thus the largest number of people bet on the sport illegally or on some international app. Betting on cricket is not considered to be a game of skill and is rather a game of chance thus betting on cricket is illegal in India.

The most important question arising here is whether the games and money placed on apps such as Dream 11 are legal or illegal in India. Dream 11 is a fantasy sports app in India that allows the users to play fantasy games such as cricket, football, basketball, etc, and also allows the users to earn money. Since the success of Dream 11, there have been several other similar apps that have also started operating.

Even though there are similarities between betting and Dream 11, there are differences that make Dream 11 legal in the country. Betting requires a pure game of chance and no skills are required. Dream 11 requires the users to make a selection of the players based on their knowledge and understanding of the different players and thus involves skills on the part of the user. The money that is placed is placed for the full match and not for a single ball or over like in betting. Along with this, the winnings that are made on Dream 11 are legal and are taxed by the government.

CONCLUSION

With each state having the power to make laws on the topic of gambling, there is a multitude of understanding as to what is and what isn’t gambling. This makes the legal stand on gambling unstable which further means that India is missing out on a lot of investment from foreign countries as people like to invest in a country that has a stable legal system.

With the coming of the internet and online gambling, it has become all the more difficult as people from different states are gambling on the same platform. This difference in the laws provides an unnecessary hindrance to the companies that are trying to understand the true potential of the market and are not able to do so.

There is exponential growth in the gambling industry, especially in recent years. This means that there is a growing need for central legislation on gambling. Unified legislation on gambling will not only motivate the investors in the domestic market but also in the foreign market.

The current system that regulates the gambling market in the country is highly unreliable and thus a unified legal system is needed to make the market more stable.

[1] AIR 1957 SC 699

[2] AIR 1996 SC 1153

[3] Dominance Games Pvt. Ltd. v. State of Gujarat and Ors., (2018) 1 GLR 801