Gambling is not just a thing of today. Its exact genesis lies in India’s rich cultural history, which dates back thousands of years.
In the epic Mahabharata, we’re drawn into the dramatic story of Yudhishtir, whose pivotal dice game sets the stage for a tale of triumph and tragedy. This timeless narrative captures the essence of risk and redemption, reflecting the enduring appeal of games of chance in Indian society. Even ancient scriptures Rig-Veda and Atharva-Veda, dating back to 1500 BC, echo with the mentions of games of chance, highlighting Indians’ enduring fascination with luck and skill.
Fast forward to today, and the landscape of gambling has heralded into a new digital era of gaming avenues, from virtual poker and rummy to sports betting, catering to the voracious appetite of players seeking their fortune.
But amidst this whirlwind of excitement lies legal intricacies, where the distinction between games of skill and chance holds paramount importance.
Games of Skill vs. Chance
In the Indian legal framework, the distinction between games of skill and games of chance holds immense significance.
Think of classics like Rummy, where players must rely on their abilities and talents to emerge victorious. This is classified as a game of skill. In contrast, games of chance are determined by luck or random variables. Whether card games, roulette, or dice games, luck holds sway, leaving participants at fate’s mercy.
Several lawsuits from businesses and gaming groups specify the difference between the games of skill and chance. The Supreme Court’s landmark ruling in State of Bombay v. R.M.D Chamarbaugwala (1957) established that skill must dominate a game to avoid being categorized as chance-based. This principle was expanded upon in K.R. Lakshmanan v. State of Tamil Nadu (1996), emphasizing the importance of skill over chance in determining a game’s legality. In essence, a game must predominantly rely on a player’s understanding, training, and experience rather than random chance for success.
Rummy, one of the most popular games online, was declared a game of skill by the Supreme Court in the State of Andhra Pradesh v K. Satyanarayana & Ors (1967). The court recognized its blend of memorization, strategy, and decision-making despite the chance in card distribution. The court emphasized that chance alone cannot define a game if skill predominantly governs its outcome, distinguishing Rummy from mere chance-based games.
Similar narratives have unfolded in various High Courts. The Bombay High Court, in Gurdeep Singh Sachar v. Union of India and Ors., praised the intellectual prowess involved in platforms like Dream11 fantasy sports, confirming them as skill-based games. Similarly, the High Court of Punjab and Haryana, in Shri Varun Gumber v. Union Territory of Chandigarh & Ors (2017), commended the strategic acumen inherent in fantasy sports, cementing their status as skill-based activities.
Through these lenses, we can observe how the Indian legal system emphasizes the significance of skill and chance as defining factors in establishing the legitimacy and categorization of different games, securing safeguards that extend well beyond entertainment.
Law and online gambling: the grey area
In India, the exclusive competence of each state over gaming regulation leads to a dynamic and constantly changing legislative environment. However, through several amendments to legislation, the federal government has also lately placed some obligations on gaming firms.
The Central Legislation
At the central level, the foundation of gambling laws is the Public Gambling Act of 1867, a legal artifact from British colonial rule. This law criminalizes the operation and visitation of gambling establishments. However, it does not directly address online gambling, as it predates the advent of the internet.
The Information Technology Act of 2000 governs electronic activities in the country. While it doesn’t explicitly mention online gambling, it provides a legal framework for electronic transactions and internet usage. Section 67 of this Act, primarily focused on the transmission of obscene content, can be invoked to regulate illicit online gambling activities. Moreover, Sections 67A and 67B grant authorities the power to enact laws concerning online gaming.
Significantly, the Payment and Settlement Act of 2008 empowers the Reserve Bank of India to oversee electronic payments, a move partly aimed at regulating online gambling. The complexities of foreign direct investment policies further entangle the sector, especially for lottery and gaming companies.
State-Wise Legislation
In India, each of the 29 states and 7 Union territories holds the authority to decide independently on legalizing gambling. As a result, the classification of games as skill-based or chance-based typically undergoes a case-by-case evaluation by each state.
For instance, the Assam Game and Betting Act of 1970 prohibits betting and invitations to bet, covering both skill-based and chance-based games. Similarly, the Orissa Prevention of Gambling Act, 1955 follows suit in prohibiting games played for money or stakes, exempting social clubs or parties engaged in recreational games from these restrictions through general or special orders.
Sikkim has taken a proactive approach to regulating online gambling with the Sikkim Online Gaming (Regulation) Act of 2008. This law legalizes online sports betting, casino games, and poker within the state’s boundaries. Conversely, the Nagaland Prohibition of Gambling and Promotion and Regulation of Online Games of Skill Act of 2016 explicitly identifies poker and rummy as games of skill.
Recent amendments to gaming laws in Karnataka have restricted residents from engaging in online games of chance, such as gambling, betting, and wagering. While Goa is renowned for its offline gambling scene, online gambling activities remain unaddressed by explicit legislation. Although some online gambling reportedly occurs, the majority of such activities are still considered illegal in Goa.
Overall, these laws aim to safeguard individuals from financial losses, addiction, and mental distress while fostering a conducive environment for players to participate in games without undue stress or fear.
Conclusion
The rapid growth of the Indian online gaming industry highlights the urgent need for unified regulations and a central regulatory authority. The current fragmented legal framework, varying from state to state, poses significant challenges for all stakeholders.
A centralized approach, possibly achieved by shifting betting and gambling regulation to the union list, could effectively streamline regulations and address addiction and financial integrity issues. In conclusion, the dynamic nature of the Indian online gaming landscape calls for careful navigation and thoughtful regulation.
With a standardized, comprehensive legal structure, India can harness the industry’s potential while safeguarding the interests of all involved parties.