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Is Online Betting Legal in India?

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Karan Modi, A 2nd-Year, B.K Mercantile Bank Law College Student has written this Article “Is Online Betting Legal in India”

Introduction

Before diving into online betting, let’s understand what is betting.  According to the Oxford English Dictionary, “Betting can be defined as an act of gambling money on the outcome of a race, game, or another unpredictable event.”

Gambling can be defined as betting, gaming, or participating in an activity focused on luck rather than skills. In gambling, people are lured to win a large sum of money or any other prize by wagering some money.  To control gambling in the nation of India, Brithishers passed legislation in the year 1867, the Public Gambling Act of 1867. Only 3 states – Goa, Daman, and Sikkim – allow gambling.

Difference Between Betting & Gambling

Most people think that betting and gambling are the same things but there is a thin line between them. An important distinction between betting and gambling is that in betting the stakes are placed on an event, the outcome of which is based on the performance of the players, and their skill, whereas in gambling, the stake is placed on an event without any clue of the outcome or based on pure luck.

Topic not Covered in the Ambit of Gambling

Followings are the things that do not come into the ambit of gambling.

Betting on a horse race

Case: K.R. Lakshmanan vs. the State of Tamil Nadu 1996[1]

Horse racing is not chance, but a test of equine speed and stamina ruled by the court. Experts train the horses to run and constantly watch their form. People universally recognize horse racing as a sport. Specially trained jockeys acquire considerable skill, technique, and knowledge in horsemanship over years. Thus, it is not gambling.

1.Game of skill: Excluded under the gambling act and by the Supreme Court’s judgment

2.Game of skill: Prior knowledge and skill have to be the predominant factor

3.Game of Chance: As the name suggests it depends upon luck.

CASES:

R.M.D. Chamarbaugwala vs. Union of India 1957[2]

The central government authorizes states to make game-related laws under the Act.

State of Andhra Pradesh vs. K. Satyanarayana 1968[3]

The court held that collecting a fee for maintaining the game of skill is legitimate because rummy requires a certain amount of skill. So, it cannot be said as gambling.

Lotteries regulated by the Lotteries Regulations Act, 1988

The central government authorizes states to make game-related laws under the Act. Some states have banned lotteries and after the year 2020 playing lotteries are legal in 13 states online or offline which are, Punjab, Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, West Bengal, Kerala, Goa, Maharashtra, and  Madhya Pradesh.

Is Online Betting Legal in India?

The term “online betting” means the practice of using the internet to place bets and gain money. It takes place in online settings and includes sports betting, rummy, and poker.

As the IPL is going on most of the people of the nation is watching it on TV or live in a cricket stadium, and the audience is also seeing the advertisement of many fantasy game applications like Dream 11, My 11 Circle, Rummy Circle, and many other applications. With this, a question may arise as to whether online betting is legal or illegal in India. In these types of fantasy sports, the selection of the team doesn’t influence the game’s outcome but the game influences the winning outcome.

The Public Gambling Act of 1867 defines the act of “public gambling” and the keeping of a common gaming house as a criminal and punishable act in India. However, online fantasy sports gaming is considered to be an exception under the Act, wherein the provisions and punishments of the Act shall not apply to games played by the user using their skills and knowledge as primary tools.

As “Betting and Gambling” in Entry 34 in the state list of the seventh schedule of the Indian constitution, the state government can make rules regarding it and the central government cannot intervene in any state proceedings. In this aspect, for the websites offering online fantasy sports gaming, the Indian states with no clearance regarding the offering of pay-to-play contests include Sikkim, Assam, Odisha, Telangana, Nagaland, and Andhra Pradesh.

 Some states have enacted laws on betting and gambling which are,

  • Bombay Prevention of Gambling Act, 1887
  • Goa, Daman, and Diu Public Gambling Act, 1976
  • Assam Gaming and Betting Act,1970

Landmark Judgments Related to Online Betting Legal in India

Shri Varun Gumber Vs. Union Territory of Chandigarh and others[4]

The Court held that playing the Dream11 game involves considerable skill, judgment, and discretion and that success on Dream11 arises out of users’ exercise of knowledge, and skills.

The Court also held that ‘the element of skill’ had a predominant influence on the outcome of the Dream11 game.

It is a virtual platform where participants have to choose a team consisting of players of participants choice and create a fantasy team of real-life players, which they believe can make them a winner for the cash prizes in the competitions.

On this basis, the Court adjudged that playing on Dream11 constitutes a ‘game of skill’, which makes the Dream11 game and other fantasy games exempt from the provisions of the Public Gambling Act, of 1867. The Court finally held that Article 19(1)(g) of the Constitution of India protects Dream11 as a legitimate business activity.

This judgment is specifically regarding Dream11’s game. The Supreme Court of India dismissed a challenge to this judgment.

Gurdeep Singh Sachar vs. Union Of India[5]

In this case, the Petitioner filed a PIL against the Dream 11 Fantasy Pvt. Ltd. alleging that Dream 11 is engaged in illegal activities of gambling/betting/wagering which attract penal provisions of the Public Gambling Act, 1867. The Petitioner also alleged that Dream 11 is the evading payment of GST.

In the said case The High Court of Bombay held that online fantasy gaming is not a gambling service but is a game of skill.

Betting or Gambling should legalize or not

Governments in countries like the United Kingdom and China legalize betting and gambling and impose heavy taxes on revenue arising from them to boost their economies.

As every coin has two sides, so does the legalization of gambling and betting.

Some believe that India is a vast country and according to a report co-published by Deloitte and the Federation Of Indian Fantasy Sports (FIFS) in February 2022, India has become the largest fantasy sports market in the world with over 200 Indian operator companies, successfully surpassing the USA’s over 50-year-old fantasy sports market. Having a market size of over Rs 34,000 crore, the industry currently is catering to over 13 crore registered users in the country[6]. So legalization is necessary due this government can generate tax revenue which will be helpful.

 Right now gambling is illegal but there are many people doing gambling and we can see that in the news if it can legalize then the state can curb the generation of black money.

On the other side betting and gambling become legalized, and it can affect the common people as scientifically proven that these kinds of activities are addictive and harmful to people, due to this greed for earning money common people to gambling and can lose their wealth in this. This is why in the advertisement of fantasy sports, the company said to people to play it with caution as it may be addictive.

Conclusion

Online betting is a gray area because the Public Gambling Act of 1867 came into force at a time when there was no internet in that time so it is outdated and does not mention anything about online betting.

You can find more information on the legality of Fantasy Sports in India on the website of the  (FIFS) Federation of Indian Fantasy Sports. FIFS is India’s first and only self-regulatory Sports Gaming industry body formed to protect consumer interest and create standardized best practices in the Sports Gaming industry.

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References:

  • http://www.chiramritlaw.com/wp-content/uploads/2019/08/Newsletter-July-2019-Edition.pdf
  • https://fifs.in/
  • https://indiankanoon.org/

[1] 1996 AIR 1153, 1996 SCC (2) 226

[2] 1957 AIR 628 1957 SCR 930 

[3] 1968 AIR 825 1968 SCR (2) 387 

[4] 2017 Cri. L. J. 3827

[5] (2019) 75 GST 258 (Bombay)

[6] https://www.financialexpress.com/business/brandwagon-fantasy-sports-platforms-are-enablers-of-indias-economy-2920188/

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