LEGALITY OF GAMBLING IN INDIA
Author: Saptarshi Roy, II year of B.A.,LL.B(Hons) from St. Xavier's University, Kolkata.
When we go back in the past, we see gambling for the first time in the times of Mahabharata where Yudhishthira bet his brothers and Draupadi in the game of dice. So, gambling is a part of human instinct. Therefore, if we regulate this completely, then only it will benefit us.
During British rule in 1867, the legislation was passed which was known as the Public Gambling Act 1867. It is interesting to know that according to the Gambling Act of 2005, it is legal for United Kingdom residents to gamble due to changing societal norms, whereas India follows the pre-Independence gambling legislation made during the British rule.
In India, gambling falls under the state subject, and the states are entitled to formulate laws for gambling activities in their own states. So the states have the freedom to follow the central act, or they can make their respective laws.
This power has been provided by List II of the Seventh Schedule of the Constitution of India which endows the state Governments with the power to legislate on matters concerning gambling and betting. In India, gambling is not defined under the gambling legislation.
There are 3 things that do not come within the ambit of gambling. Firstly, betting on a horse race; secondly, games of skill like Dreaming 11, which is excluded under the Gambling Act and by the court’s judgment; and thirdly, lotteries which are regulated by lottery laws of India. In India, gambling is only allowed in 3 states, which are Goa, Daman and Sikkim. Now if we look into lotteries, it is legal in 13 states, be it online or offline. These states are Assam, Arunachal Pradesh, Goa, Kerala, Madhya Pradesh, Maharashtra, Manipur, Meghalaya, Mizoram, Nagaland, Punjab, Sikkim and West Bengal.
There is a huge contrast between a game of skill and a game of chance. In games of skill, the player has prior knowledge regarding that game, and the success depends on the prior experiences of that game. There may be certain games which have a combination of skills and chances, but the player needs to have skill since the skill is the predominant factor. So a game of skills is not prohibited in India since it does not come within the ambit of gambling. Whereas in Game of Chance, the game depends on factors like luck, so the final outcome of the game cannot be possible to predict. Therefore, the game of chance is prohibited in most states of India.
As the Public Gambling Act was enacted in 1867, it does not define clearly which games fall under the category of game of skill and does not contain any regulations or rules with regard to online gambling. For example, Nagaland has a separate legislation known as Nagaland Prohibition of Gambling and promotion and Regulation of Online Games of Skills Act, 2005 which deals with game of skill,, but other states do not have these types of legislations enacted.
Therefore it rests upon the Courts to interpret and decide whether the games will come within the ambit of a game of skills or not. The Supreme Court decided betting on horse races and rummy cannot be considered gambling and said that gambling could not be considered a trade or business under fundamental rights. In the case of R.M.D. Chamarbaugwala v. Union of India, 1957, the Supreme Court said that when a certain level of skill is involved, it cannot be considered gambling. In the case of State of A.P v. K. Satyanarayana, 1968, the court allowed the establishments to gather a little fee for maintaining and running an equivalent for games of skill, like rummy. The court also said that rummy also involves considerable skill, so it is not a pure game of chance. In the case of K.R. Lakshmanan v. the State of Tamil Nadu, 1996, the Supreme Court said that horse racing was a game of skill and cannot be called gambling.
Now if we look into online betting, in September 2020, Google banned and removed the Paytm app from the play store when Paytm started UPI cashback on cricket premier league which violated Google play store’s guidelines, so there was a violation of sports betting policies.
Also around October, 2020 Google issued notices to popular food delivery services like Swiggy, Zomato as they were attracting customers through promotional discount campaigns regarding IPL where customers could bet or predict in that app certain aspects of IPL matches, and if they won points, then they could use those points as discounts for the food orders.
According to Google, these promotions violated Google play store policy which strictly discourages any activities directly or indirectly linked to gambling. So, if we talk about Dream 11, which is a number one fantasy sport platform, we can predict the outcome of the game without betting money. The players have to select from both teams and the dream team with the best possible combination has to be formed and accordingly points will be scored based at the players' performances.
The players who come at the top win the prize money. The selection doesn’t influence the game’s outcome, but instead the game influences the winning outcome. According to the business of fantasy sports, it has seen 3 times growth over the past 12 months in India, and it is still growing.
If we take the example of the UK and China, betting is legalized and heavily taxed by the government so that the revenue can help in boosting the economy of their country. So in India, if we look from a business point of view, legalizing betting has various kinds of advantages like there will be less corruption, there will be a boost in the economy, it will curb the generation of black money.