GAMBLING LAWS IN INDIA: A COMPARITIVE STUDY WITH LAWS IN U.K AND U.S.A

AUTHORS:

Jahnvi Gupta, DNLU Jabalpur

Princee Dhawan, Amity University Chattisgarh

EDITOR: Akansha Singh, RMLNLU Lucknow




INTRODUCTION

Gambling is one of the oldest activities of mankind. It is defined as the act of wagering or

betting for money or for money’s worth on a game of chance. Section 12 of public gambling

act 1867 says any game of chances will be considered as gambling and not the game of skill.

There are no traces from where gambling is being evolved but the first-ever practice of

gambling is recorded by Chinese. It is believed that the practice of gambling had existed

since ancient times. Various evidence has been found especially in Asian countries like

China, India, and Japan that it was part of our ancestor’s leisure activity. Even India has an

intriguing history regarding this and also India has a tradition of gambling during the festival

like Diwali to which the Supreme Court has also accepted. With regards to the legality, there

are no uniform laws and is restricted to lotteries and horse racing only. Earlier gaming was

only restricted to offline in house arrangements but the revolution of Internet technology has

opened new dimensions of gaming and has created a global market for activities on which

people can legally place a wager in their respective jurisdiction. Today, people place their

wagers over phones, personal computers etc. Easy access to the internet and the presence of

an international website for betting creates an important issue to which India does not have

explicit laws, and have various loopholes, making it ambiguous and vague. The main

enactments which govern the gaming in India are Public Gambling Act, 1867 (PGA) and the

Prize Competitions Act, 1955 (PCA). Prior to the commencement of our constitution public

gaming act 1857 governed the gambling in India inspired from United Kingdom’s Gaming

Act 1845 and Betting Act 1853. But after the enactment of the constitution of India, Betting

and Gambling was added under list II of the seventh schedule (entry 34 of state list), which

gives the power to the state government to make laws for it and many states have adopted the principles of public gaming act 1867 and also it is totally on discretion of the state

government to enact laws for their respective states, Some of the states have a complete

blanket ban and some has allowed restrictive gambling ex Goa Sikkim etc.

The broad division between skill-based and chance-based gaming has always been the

decisive factor in determining the ambit of gambling. Section 12 of the Public Gambling Act

exempts games of skill from the penal provisions against gambling – ‘Nothing in the

foregoing provisions of this Act contained shall be held to apply to any game of mere skill

wherever played’. which makes skill-based betting legal in India and many states have 4

interpreted it through the Landmark judgment of the Supreme Court which is the case of Dr

K.R. Lakshmanan v. State of Tamil Nadu and Anr (1996) 2 SCC 226 that games which

satisfy the test of skill are not regulated under gambling legislation. 5

Sports gambling has always been in the limelight because of its distinct selection procedure

of games. Rummy is considered a game of skill according to the case of Play Games 24x7

Pvt. Ltd vs Ramachandran K & anr and betting in Rummy is considered to be legal under 6

section 30 of the Indian Contract Act 1872 Horse racing is legal in India because it is a 7

skill-based game whereas, Betting in other sports games like cricket is not allowed. This has

always been in controversy and even the Supreme Court also does not give guidelines for the

selection of games.


GAMBLING LAWS IN INDIA

“It emphasizes a mistake that many gamblers make: blaming bad luck instead of trying to

work if they made a bad play or bet.” 8

80% of the Indian population involves gambling at least once in a year. The betting is

practised over any sport or any casino table. The most popular form of playing gamble among this is Horse racing, besides; online betting is more prevalent among the Indian population over sports like cricket, football, hockey, chess and so on. 9

Indian gambling laws restrain betting and wagering games especially which are solely based

on chances, luck, and probabilities. Despite this, the Indian Gambling industry is one of the

emerging and seeding industries in terms of online gambling. According to statistics, the

Indian gambling market makes growth at the rate of approx. 20% annually. In Nov. 2019, 10

227 million online gamblers were reported in India. 11

Some states such as Goa and Sikkim have approved Gambling by the acts: Goa, Daman &

Diu Public Gambling Act, 1976, and Sikkim Regulation of Gambling (Amendment) 2005

respectively. But the said acts are subjected to prior permission from respective state

governments. 12


ONLINE GAMBLING IN INDIA

Sikkim has approved online gambling through Sikkim Online Gaming (Regulation) Act,

2008, sanctioned by the Sikkim Legislative Assembly to control and regulate the acts. 13

Nagaland has enacted Nagaland Prohibition of Gaming and Promotion and Regulation of

Online Games of Skill Act 2006. This act prescribes the Regulation and promotion of the

“Games of Skill” through an issued license. 14


INDIAN GAMING MARKET

1. Lottery

Lotteries are secluded from Gambling through the enactment of the States’ Gambling Acts.

2. Horse-Racing

In the famous case law – Dr. K.R. Lakshmanan v. State of Tamil Nadu & Anr. Supreme 15

Court declared that gambling in sports such as Horse racing, along with Football, chess,

Rummy, Golf, and baseball are games that require a skill. Hence, horse riding requires proper

judgment, technique about the type of the horse and the jockey, nature of the race, etc. All

this requires proper knowledge and skills about the game.

These exceptions of gambling were created after the above case law. The states which have

approved horse racing betting are:-

Andhra Pradesh, Assam, Delhi, Harayana, Karnataka, Maharashtra,

Meghalaya, Punjab, Tamil Nadu, Uttar Pradesh, and West Bengal. 16

3. Prize Competitions

These are regulated by – Prize Competitions Act, 1955. 17

4. Sports Betting

Although the Supreme Court has not yet delivered its decision with respect to the legality of

the game of chance and game of skill, so this is still questionable in India and growing at a

quite good rate. Sikkim has approved Online betting through the Sikkim On-line Gaming

Regulation Act 2008. Sikkim can issue a license for betting for the natives subject to the

approval of the state government. Meghalaya has secluded the Sport of Teer ( Form of

archery) from the states Gambling Act and betting over it is legalized in Meghalaya. 18

5. Games of Skill and Games of chance

Card games of Rummy & bridge, golf, chess, horse riding are considered as the game of skill

as there’s a requirement of knowledge and skill to place the bet.

On the other side, Game of chance is purely based on wager and probabilities. Goa and

Sikkim have issued license and sanctioned the act of gambling in casinos, operating offshore

as well as on land. 19


GAMBLING LAWS IN INDIA AND UK

In the UK, the very first act - Betting & Gambling Act, 1960 allowed the Bingo halls and

casino tables. Whereas in India, there still exists a loophole in the legality of Gambling laws,

nothing is specified clearly for the general population, and yet the gambling market is

consistently growing. Betting shops, in the UK, were legalized on May 1, 1961, However 20 21

in India, there are so many interpretations of the laws. Though, India restricts the gambling

acts, except for some of the states that have received the approval Casinos and Bingos. 22

Gaming Act, 1968 in the UK, formed stringent rules and regulations for carrying out

Commercial Casinos along with the table games. In India, the Public Gambling Act, 1867 23

has formed the laws concerning gambling and betting. 24

In the UK, online betting was approved through the Betting and Gaming Duties Act, 1981. 25

In India, there's no description of Online betting in the Indian Gambling Act. 26

In the UK gambling Act, the minimum legal age of gambling is specified, i.e. 18 years. And

this age applies to Adult gaming centres, betting clubs, casinos, online betting, and

racecourses. National lottery and football pools are exceptions of this provision, which means

these, along with noncommercial gambling and prize gambling, could be wagered from the age of 16 years. And whoever is caught betting below the age of 18 (excluding the

exceptions) would be strictly held liable for the criminal offence. 27

UK gambling laws has an interesting feature i.e. these acts do not provide facilitation in

monetary value to the winning citizens. However, in India, majorly people gamble in the 28

the greed of money.

UK commercial gambling laws are regulated by the UK Gambling Commission, and it’s a

non- departmental body. It is the highest body and includes all kinds of Gambling. Indian 29

Gambling Acts are governed by the Public Gambling Act, 1867. Additionally, all the states

have their own gambling laws except some of the states, which are governed by the state

legislations and function accordingly. 30


GAMBLING LAWS IN INDIA AND USA

US Gambling Laws are regulated by both federal legislation and State legislation so does 31

Indian gambling laws are regulated by the central government and state government. 32

The U.S.A. has a commerce clause in its constitution which is responsible for regulating

interstate gambling, international gambling, betting among native American territories, and

the United States. Indian gambling acts do not have any such clauses. There’s just one body 33

that governs overall gambling acts and i.e. Public Gambling act, 1867 and amendments keep

on happening in the same act. 34

In the USA every state has its own freedom to analyze and decide the nature of gambling

laws it wants under its border. Also, all the states have prescribed different legal ages in

respect to the people’s involvement in betting and gambling, depending upon activities. In India, there’s no such provision of legal age depending upon the activities involved, however,

there is a freedom with the states to adopt any kind of gambling laws as suited in their region.

A wire act was passed in 1961, governed by the Department of Justice, to make online betting

and gambling as unlawful. This act came with the strict warning of prosecution if caught.

Another act: The Amateur Sports Protection Act (PASPA), also known as the Bradley Act

was passed in 1992. It was a little effort to push the US government to illegalize sports

betting in the country. Yet another act: The Unlawful Internet Gambling Enforcement Act

(UIGEA), passed in 2006. This act was an effort to totally illegalize online wagering. Its

basic aim was to outlaw the access of the money earned through online gambling, urging

banks and other financial institutions to stop forwarding the gambling payment. Although in 36

India, the Public Gambling Act, 1867 has prohibited online gambling. The Indian state,

Sikkim is the only state that has legalized Online gambling in 2008. Further, there’s no

mention in any Indian Gambling laws about the sports betting, neither has the apex court of

India has intimated about the same.37




4 Section 12, Public Gambling Act 1867 .

5 Dr. K.R. Lakshmanan v. State of Tamil Nadu and Anr (1996) 2 SCC 226 (India).

6 Play Games 24x7 Pvt. Ltd vs Ramachandran K & anr RP No. 514 of 2019 in WP (C) 35535/2018(India).

7 Section 30, Indian Contract Act 1872.

8 Ian Fleming, Casino Royale, Our Favourite Gambling Quotes ,(July 21, 2020, 1:45 A.M.)

https://www.gamblingsites.com/info/gambling-quotes/ .

9 India Post News Weekly, Positive Market Statistics in the Gaming Industry , Key Online Gambling Statistics in

India (July 21, 2020, 2.06

A.M.) https://www.indiapost.com/key-online-gambling-statistics-in-india/#:~:text=As%20of%20November%20

2019%2C%20there,reported%20using%20mobile%20devices%20routinely.&text=In%20the%20past%20decad

e%2C%2080,casino%20table%20games%2C%20or%20slots .

10 Ibid.

11 Ibid.

12 Hammurabi & Solomon, India: A Walk Through The Gambling Laws In India, (July 21, 2020, 3.19 A.M.)

https://www.mondaq.com/india/gaming/617478/a-walk-through-the-gambling-laws-in-india .

13 Ibid.

14 Supra Note 2.

15 1996 SCC (2) 226 .

16 Krida Legal, In a Nutshell : gambling law in India, Lexology (July 21, 2020, 4:39 A.M.)

https://www.lexology.com/library/detail.aspx?g=e169cba8-9acc-406d-a434-8e83b39967ae

17 Ibid.

18 Gambling Laws in India , (July 21, 2020, 5:19 A.M.) https://sportsbetting.net.in/gambling-laws/ .

19 Supra Note 5.

20 How Gambling is regulated , Be Gamble Aware (July 21, 2020, 5.55 A.M.)

https://www.begambleaware.org/understanding-gambling/how-is-gambling-regulated/#:~:text=As%20a%20gen

eral%20rule%2C%20the,UK%20is%2018%20years%20old.&text=The%20exceptions%20to%20this%20are,lo

w%20stakes%20and%20prizes%20gambling.

21 Ibid.

22 Supra Note 9.

23 Supra Note 13.

24 Nishith Desai Associates, India: Gambling Laws and Regulations 2020 (July 21, 2020, 6.37 A.M.)

https://iclg.com/practice-areas/gambling-laws-and-regulations/india

25 Gambling related Legislation , Gambling Commission (July 21, 2020, 6.56 A.M.)

https://www.gamblingcommission.gov.uk/Footer/Gambling-related-legislation.aspx

26 Supra Note 2.

27 Supra Note 18.

28 Supra Note 13.

29 Benjamin Webb, UK Gambling Laws- What you need to know , (July 21, 2020, 1:17 P.M.)

https://www.bestcasinosites.net/blog/uk-gambling-law.php .

30 Supra Note 17.

31 Gambling, Legal Information Institute (July 21, 2020, 4:35 P.M.) https://www.law.cornell.edu/wex/gambling

32 Supra Note 5.

33 Supra Note 24.

34 Supra Note 9.

35 US gambling laws and Online regulation , Gambling sites (July 21, 2020, 5:16 P.M.)

https://www.gamblingsites.com/online-gambling-jurisdictions/us/ .

36 Supra Note 24.

37 Supra Note 17.


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