Cyber Crime/Online Fraud

Is Online Gambling in India Legal?

LegalKart Editor
LegalKart Editor 04 min read 476 Views
Last Updated: Feb 08, 2024
Legality Of Online Betting In India

There is a mention of gambling in the Indian Constitution. It states that gambling covers any engagement or operation whose outcome is determined by luck or accident, as well as any action or endeavour that is started or carried out, knowing there is a possibility to win or lose. The term "online gambling" refers to the practice of making bets and collecting winnings online. It takes place in a virtual setting. This covers poker, gambling, and sports betting. Online gambling has emerged as a contentious topic recently in India. It's unnerving to see how quickly gambling issues have spread in today's fast-paced internet age. People now have access to a variety of online gaming platforms and can engage covertly whenever and whenever they choose, which was previously unthinkable. In India, 40 per cent of internet users wager, and The Week's analysis indicates that India may surpass Britain in terms of the numerical quantity of gamblers per capita.

 

LEGISLATION

The Public Gambling Act of 1867 establishes and helps understand the rules related to the "public gambling" punishments. According to Section 12 of the Act, any activity of pure skill is exempt from these sanctions. Therefore, the main distinction between gambling and gaming is that gaming is allowed by law and requires skill, whereas gambling is completely dependent on luck. However, it is obvious from the act and its year of making that the act is pretty old and might not be that well-equipped to deal with online gaming and gambling in India. Also, it can be difficult to tell whether a game is in the chance or skills divisions. There is a gap that allows for conflicting interpretations. Hence, determining whether a certain game is within the scope of the talent or not is within the purview of the Indian Judiciary. With this basic understanding, we move ahead with the analysis of online gambling. 

 

STATES WITH SPECIFIC REGULATIONS

With various modifications, the governments of Delhi, Madhya Pradesh, and Uttar Pradesh have embraced the Public Gambling Act. Several areas, including Goa, Sikkim, and some northeastern states, have enacted specific regulations to control public gambling. However, not all these states have legislation governing online gambling because it is still a relatively new and developing industry. The following states have approved explicit legislation to regulate online gambling:

  • The Sikkim Online Gaming (Regulation) Act governs online casinos that feature games like blackjack in Sikkim. Organisers are only permitted to provide the games through intranet endpoints and are obligated to get a licence. Through Internet terminals, sports betting is also permitted in Sikkim. 

  • As per the Meghalaya Regulation of Gaming Act, the Meghalayan government permits both physical and online casinos. Once licenced, Meghalaya also permits sports betting in the nature of horse betting. 

  • Poker is regulated in the state of Nagaland as a "game of skill" under the Nagaland Prohibition of Gambling and Promotion of Regulation of Online Games of Skill Act. 

  • In Tamil Nadu, Andhra Pradesh, and Kerala, comparable laws were passed outlawing all internet gaming, including skill-based games. In court, the legislation in Kerala and Tamil Nadu prohibiting skill-based games was overturned. 

  • Tamil Nadu has seen an important recent development in relation to this. A few months back, Tamil Nadu issued an ordinance outlawing all online gaming. The state legislature approved a bill to resurrect the ordinance around a month later. 

The bill needs the governor's assent in order to become law as of the time of this publication. Additionally, the ordinance has not yet gone into effect.

 

It can be seen that the laws related to online gambling vary in various states, and there Is a lack of standardisation. As was already said, there is a dearth of consistency and clarity in the rules governing internet gambling across the nation. Only one decision, M/s Gaussian networks Pvt. Ltd. v. Monica Lakhanpal and the State of NCT, addressed online gambling and made the following ruling: 

  • A skill-based game that includes wagering does not qualify as gambling if played. 

  • It is unlawful if players are drawn to a game solely for the chance to win money. 

  • Regardless of whether it would be permitted in the real world, any game of skill played to make money would be illegal on virtual platforms. 

  • Because it would encourage online gambling, gaming websites are unable to unite the winning hands.

The case was later dropped during the revision petition's last argument; therefore, it no longer sets a precedent or may be used as a reference.

 

Other laws that have restrictions on the advancement of gambling include the FEMA 1999, the Prize Competition Act 1955, the PMLA 2022, the Telecom Commercial Communications Customer Preference Regulations 2010, and the Cable Television Network Rules 1994. 

The government has been attempting to enact legislation that controls gambling because, if appropriately and lawfully taxed, it would prevent people from losing money and generate income for the nation. The Indian Law Commission (LCI) encouraged the government to legalise gaming in 2018. And it published a thorough report urging India to legalise gambling in order to generate much-needed tax revenue. Given the potential for gambling in India, a developing market, many foreign investors are interested in setting up shop there.

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