An Introduction to Gambling Laws in India

September 7, 2016 Posted by India Briefing Reading Time: 5 minutes

The general law governing gambling in India is the Public Gambling Act, 1867. However, states have significant regulatory leeway with gambling laws, as the sector is listed on the “State List” under the Seventh Schedule of the Constitution of India. This explains how a state like Goa has legalized the functioning of casinos within its territory, and Sikkim permits gambling, subject to regulations by the government. States like Assam and Orissa, however, have prohibited any form of betting or gambling.

“Games of Skill” Exemption

The Public Gambling Act exempts “games of skill” from the purview of the law. In K.R. Lakshmanan v. State of Tamil Nadu, the Supreme Court defined a ‘game of skill’ to mean “one in which success primarily depends on the superior knowledge, training, attention, experience, and adroitness of the player”. According to this case, games like golf and chess are considered to be “games of skill”.

Horse race betting is allowed in India because the Court used different references to explain how the same could be considered a game of skill as the betting is based on evaluative skills, and factors such as the skill and management of the rider.

In another landmark Supreme Court judgment in the State Of Andhra Pradesh vs. K. Satyanarayana & Ors, the card game “Rummy” was held to be a game of skill as the “fall of the cards had to be memorized”, and considerable skill was required in “holding and discarding cards”. On the other hand, the legality of poker is ambiguous. Though the Madras High Court has made reference to poker being a game of skill, there is a lack of a comprehensive judgment by the Supreme Court on the subject, and hence, confusion prevails.

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Online Gambling

The central legislation that governs gambling is the Public Gambling Act, 1867. The Act primarily outlaws “gambling houses”, and provides relatively mild punishments. For example, the penalty for being found in a gambling house is a fine of US$ 0.015 (Rs 100) or imprisonment not exceeding a month.

The law predates the internet by more than a century and a half, and is thus, not equipped to adequately deal with the widespread business of online gambling in India. Like other issues related to gambling and betting, online gambling falls in the murky area of ambiguous laws that require clarification. In general, most online gambling and betting websites are hosted and run outside the territory of India, and are therefore are difficult to regulate. The internet allows Indians to place bets and gamble through offshore gambling websites and payment gateways.

Websites that provide online poker, rummy, and other such card games have also been taken to Court to decide the legality of their running. The Supreme Court, however, refused to take a stance on the matter of these online games until the government took a policy decision on this issue.

Control over online gambling in India could be exercised through provisions of the Information Technology Act, 2000. Intermediaries (such as Internet Service Providers/ISPs) must comply with intermediary compliance and due diligence requirements. Further control could also be exercised by regulating online payment gateways that form an essential component of online gambling and betting.

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Conclusion

The ambiguity of gambling laws in India could prove to be a problem. According to a report by KPMG, in 2009, the estimated betting market in India was worth US$ 60 billion. This included the unregulated and illegal betting and gambling in the country as well. Further, there are opinions that suggest that legalizing betting with respect to sports like cricket could prove to be beneficial, not only to the economy, but also to regulate the illegal betting and match-fixing industry. The same could also be said for other areas where gambling and betting is possible. As stated previously, India’s gambling industry is huge and it is high time that a policy decision be taken by the government, which conclusively establishes the status of gambling in India.

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