Are you skilled enough to take a chance? A legal and regulatory analysis of gambling laws in India
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There are several laws in India that govern the business of online gaming. Public Gambling Act, 1867 prohibits all activities related to gambling. The states have their own gambling laws. Sikkim and Nagaland have enacted laws pertaining to 'Online Gaming'. In Telangana, Assam and Orissa gambling is prohibited. Recently, a petition was filed in the Bombay High Court by Keshav Muley, an office-bearer of a regional political party, that sought registration of an FIR against the makers of the game application called 'Ludo Supreme'.
The Supreme Court of India ruled that horse racing, chess, rummy, golf and baseball are all games of skill. The Madras High Court ruled in 2012 that playing rummys for stakes is gambling. However, the Supreme court allowed the poker club Mahalakshmi Cultural Association to withdraw its Special Leave Petition. The members of the club had been acquitted of all the criminal charges by the trial court. They were found not guilty. It is on record that the observations contained in the High court order did not survive. In the case of Mahalaaksha Cultural Club v. Maha, it was ruled on the record the observation did in fact not exist.
There were cases filed in various parts of India concerning the fantasy sports game Dream 11. The first Indian court to rule that fantasy games are games predominantly based on skill was the High Court of Punjab & Haryana. In the Bombay High court, success in Dream. 11’s fantasy sport depends upon user's exercise of skill based. on superior knowledge, judgment and attention. Winning or losing of the virtual team created by the participant is independent of outcome of game or event in the real world. Online fantasy game format is a game of mere skill and has protection under Article 19 (1) (g) of Constitution. Gujarat High. Court directed the state to monitor online gambling games and take appropriate action under the law.
Law Commission released a report on legalizing betting and gambling in India in July 2018.
There is need for autonomous regulation for gambling and betting industry in India.
There are two questions regarding gambling laws in India.
Only an operator with a valid license granted by the game licensing authority should be allowed to provide betting and gambling services in India.
There are two categories of gambling based on higher and lower income groups. People belonging to higher income group can put higher stakes in the ‘proper gambling’ category, whereas a person belonging in lower group must limit himself to “small gambling,” and cannot stake higher amounts.
All betting and gambling transactions should be linked with the operator's and player's PAN card to protect the public from aftereffects and increase transparency.
6. The enactment related to betting and gambling should be enacted in such a way that ensures protection of the vulnerable section of society from exploitation.
7. Any income derived from such activities should be made taxable under the applicable tax laws in India.
8. Transaction between operators and participants to be made cashless. Internet gambling presents many of the same concerns as traditional gambling activities. The latest online games stand on a thin line between skill and chance. It will be worth the wait to see if the petition against Ludo will prompt the enactment of an exclusive legislation.
