The curious case of online gambling laws in India - The Daily Guardian
Connect with us

News Plus

The curious case of online gambling laws in India

Since it is not possible to prevent Internet gambling completely, effectively regulating it remains the only viable option. India can learn from the experience of several countries that have successfully regulated online gambling.

Brijesh Singh and Khushbu Jain

Published

on

A study by KPMG India in September 2019 pegs the Indian online gaming industry to be a Rs 250.3 billion industry by 2024.

Gambling is prohibited in India. The Public Gambling Act, 1867 and several local acts passed by the states make it a legally proscribed activity with punishments ranging from financial fines to years of imprisonment. Despite these laws, the Federation of Indian Chambers of Commerce and Industry (FICCI) estimates India’s illegal betting market at more than Rs 3,00,000 crore, which is about the size of India’s defence budget as of 2019. This amount exceeds the total amount India spends on agriculture, education and health by $10 billion or Rs 7.5 thousand crore.

The CBI’s report on ‘cricket match fixing and related malpractices’ talks of the emergence of betting syndicates and cartels, run on ground by bookies and punters, and hints at the involvement of the underworld. That was almost 20 years back, and betting on any One-Day International match anywhere in the world ran into hundreds of crores, according to the report.

Today, betting has gone online, with neat interfaces, embedded payment systems, dashboards to calculate odds, alert notifications and mobile applications.

There is a certain ambiguity about the application of gambling statutes to the online space as the laws are more suited to act upon a physical gaming house and related instrumentalities. Complicating this situation is the designation of certain games as ‘games of skill’ where “success depends principally upon the superior knowledge, training, attention, experience and adroitness of the player” and players can transact, bet and exchange monies playing the same. It is essential to disambiguate the policy conundrum around gambling especially in the online space as this can be utilised as an opportunity for harm prevention as well as possible gains in revenue.

Legal framework

 Rule 3(2)(b) of Information Technology (Intermediaries Guidelines) Rules, 2011 framed under Section 87(2) (zg) read with Section 79(2) the Information Technology Act, 2000 requires ‘intermediaries’ like internet service providers, network service providers, search engines, telecom operators etc. not to host or transmit any content which inter alia relates to or encourages gambling.

As per the Indian Constitution, betting/gambling is a state subject and each state has exclusive legislative competence to enact laws within the state. Most of the state legislations and the Public Gambling Act, 1867 were enacted prior to the advent of online gambling/gaming.

The Gambling Enactments are prescriptive in so much as most of the states prohibit gaming/gambling, but carve out an exception for games of skill. Therefore, the prohibitions under the Gaming Enactments would not apply if a game qualifies as a game of skill. In RMD Chamarbaugawala v. Union of India, the Apex court relied on the ‘skill test’ to decide whether an activity is gambling or not. The court held that competitions which substantially involve skills are not gambling activities but are commercial activities, protected under Art. 19(1)(g).

In order to understand the current legal status of online gambling/gaming, we have to look at the following categories: Fantasy Sports, Betting, Casino, Lottery and Poker.

A. Fantasy Sports: Skill based games are exempted under the Gaming Enactments. The Nagaland Prohibition of Gambling and Promotion and Regulation of Online Games of Skill Act, 2016 expressly recognises virtual team selection games and virtual sport fantasy league games as games of skill such as chess, sudoku, quizzes, binary options, bridge, poker, rummy, nap, spades, auction, solitaire, virtual golf and virtual racing games. A licence is a must if such games are sought to be offered online in the State of Nagaland.

Recently Dream 11’s format of fantasy sport has been held as a game of skill by the High Court of Punjab and Haryana. Even the High Court of Bombay in case of Gurdeep Singh Sachar v Union of India recognised this format of fantasy sport as a game of skill.

B. Betting: The Supreme Court in case of Dr K.R. Lakshmanan v State of Tamil Nadu held that betting on horse racing was a game of skill and accordingly is exempt from the prohibitions under most G a m i n g Enactments . These exemptions in gaming enactments are subject to certain conditions and in case of online horse racing it would be difficult to meet these conditions. But the argument of whether horse racing is a game of skill can always stand irrespective of these exemptions.

C. Casino: Casino falls under the category of gambling and betting and is prohibited under most of the enactments. Certain sub-categories of casino games under the Sikkim Online Gaming (Regulation) Act, 2008 and the Sikkim Online Gaming (Regulation) Rules, 2009 may be offered through the state-wide intranet within the State of Sikkim only.

D. Poker: In some Indian states poker is recognised as a game of skill either by: (1) enactment/ regulation such as the State of West Bengal has specifically excluded poker from the definition of “gambling” under the West Bengal Gambling and Prize Competitions Act, 1957; the Nagaland Act has specifically categorised poker as a game of skill; and

(2) Courts such as the Karnataka High Court have also held that a licence is not required under the Karnataka Police Act, 1963 (“Karnataka Act”) when Poker is played as a game of skill.

 On the contrary in the case of Dominance Games Pvt. Ltd v State of Gujarat, the Hon’ble High Court of Gujarat recently held that poker is a game of chance and a gambling activity under the Gujarat Prevention of Gambling Act, 1887 and therefore is currently prohibited in Gujarat (appeal challenging the same is pending).

The question of whether sports betting is a game of skill is pending before the Supreme Court in the case of Geeta Rani v Union of India & Ors. If the judgment concludes that sports betting is a game of skill, it will be exempt from most Gaming Enactments and can be offered in most Indian states that recognise an exemption for games of skill.

Despite above stated enactments declaring gambling as illegal activity, there has been existence of offshore betting websites which are illegally offering websites to Indian citizens and accepting bets from India, in contravention of the Information Technology Act, 2000 and the Foreign Exchange Management Act, 1999.

Ban or licence debate

Governments all over the world have been vary of regulating gambling as a licenced and controlled activity due to social, ethical, moral and religious considerations. However, lotteries and horse racing as well as certain ‘games of skill’ have been allowed to continue in a restricted manner. On the other end, countries have monopolised gambling and used it to generate non-tax revenue and tourism windfalls.

The Internet however disrupted this model by destroying jurisdictional barriers, and now players and organisers of this activity can take advantage of jurisdictional arbitrage to freely place bets, convert currencies into local or international, move money digitally across borders and even allow for digital to physical money conversion, all in real time.

A legitimate regulatory and policy predicament presents itself in the form of conflicting objectives and suboptimal solutions which range from inevitable harm to relinquishing of jurisdiction. While on one side, Anti Money Laundering (AML) and player authentication (Know Your Customer) norms need to be enforced strictly, any legalization may also result in human and economic downsides around increased social costs. Problem gamblers and new addicts may pose harm to society in the form of crime and bankruptcy costs, while issues related to degradation of quality of life and social fabric may present serious challenges to any legalisation of gambling activity for economic purposes by the state. The 276th law commission report examines these issues in great detail.

Prohibition of Internet gambling/gaming has resulted in Indian Internet gambling sites being established in other countries with little or no prohibition. Despite restrictions of Internet gambling in India, Indians are gambling online. Implementation of a blanket ban in the virtual world is impossible and thus, internet gambling will continue to grow in popularity among Indians, despite restrictions. Therefore, creating an effectively regulated internet gambling climate is important. Introducing regulatory policies and standards surrounding internet gambling will also pave the way for the country to protect its citizens by preventing underage gambling, controlling black money generation and circulation, enforce responsible gaming environment/rules, and ensure transparency in the market. Additionally, the revenue so generated by regulating and taxing betting and gambling may become a good source of revenue, which in turn, could be used for public welfare.

Conclusion

A study by KPMG India in September 2019 pegs the Indian online gaming industry to be a Rs 250.3 billion industry by 2024. India is missing out on about $1.5 billion annually in lost revenue as there is no regimen for regulation or taxation of online gambling. It is time to calibrate and counterweigh conflicting objectives to maximise public good. Since it is not possible to prevent Internet gambling completely, effectively regulating them remains the only viable option. India can learn from the experience of several countries and jurisdictions which have regulated online gambling in its myriad and ever evolving forms with considerable success. Especially in the post-Covid reconstruction phase, where other drivers of economic activity are scarce to find, setting up a discerning and ingenious set of safeguards by way of regulation around gambling can be a constructive measure.

Brijesh Singh is an author and senior IPS officer. Khushbu Jain is a practising advocate before the Supreme Court and founding partner, Ark legal.

The Daily Guardian is now on Telegram. Click here to join our channel (@thedailyguardian) and stay updated with the latest headlines.

For the latest news Download The Daily Guardian App.

News Plus

Raj Kundra writes to CBI claiming innocence in porn case

Published

on

Raj Kundra, Shilpa Shetty’s husband, approached the Central Bureau of Investigation (CBI) to claim his innocence in the pornography case in which he was arrested last year. Raj expanded on his letter to the central agency on Twitter and wrote, “A handful of corrupt individuals spoil the name of the whole organisation. It’s just a matter of time now! #CBI #Enquiry #mediatrial #truth #corruption.”

On one year of his bail in the same case, Raj Kundra had tweeted earlier, “One Year Today released from #ArthurRoad Its a matter of time Justice will be served! The truth will be out soon! Thank you, well-wishers and a bigger thank you to the trollers you make me stronger (folded hands emoji).” His posts were also accompanied by hashtags such as inquiry, word, media trial, and trollers.

According to reports, Raj Kundra claims that he was set up in the case by “senior officers of the Mumbai Crime Branch.” He has requested that the case be investigated. Raj allegedly claimed in his letter, “I have lived in silence for one year; ripped apart by a media trial and spent 63 days in Arthur Road Jail. I seek justice from the courts, which I know I will get, and I humbly request an investigation against these officers.”

Raj had previously filed an application with a Mumbai magistrate’s court to be released from the case. According to sources, police found no evidence that Raj gained any monetary or another type of gain from the alleged offence, and the prosecution has not attributed to him any intent to commit an offence, according to the application. Raj Kundra was arrested in the case in July 2021 and later released on bail after more than two months.

Continue Reading

News Plus

Saudi Arabia introduces yoga in universities

Published

on

A virtual introductory lecture on yoga was organised for all Saudi university representatives across the kingdom to spread awareness and motivate its practice as a lifestyle for all segments of society.
The lecture, organised on Monday, aimed to introduce both traditional yoga and yogasana sports to Saudi universities and give a variety of options to the students on university campuses to practice yoga, the Saudi Gazette reported. The lecture covered both mental and physical health and plans to attend professional yoga sports training to be part of competitions locally and internationally.
In cooperation with the Saudi Universities Sports Federation (SUSF), the Saudi Yoga Committee organised the event in Riyadh.
The Saudi Gazette reported that the event came within the framework of an integrated system of programmes and initiatives of the Saudi Committee for Yoga, under the title “Yoga for University Students of Both Genders.”
The event coincided with the arrival of the first yoga delegation to the Kingdom from the Asian Yogasana Sports Federation in India for the qualification course for the first Saudi batch of yoga referees, the report added.
The event included issues concerning the benefits of yoga for health and physical well-being in youth, yogasana sports for tournaments and competitions, and requirements for professional yoga training. It also included the technical regulations of the Saudi Yoga Committee for Championships and Competitions in Saudi Universities.
The lecture, which motivated the youth to join professional yoga training, also shed light on the system of professional yogasana competitions within university sports and the university league.
Nouf Almarwaai, President of the Saudi Yoga Committee, said that the committee seeks to achieve its vision of spreading yoga on a large scale within Saudi society. “Therefore it took the initiative to cooperate with the Saudi Universities Sports Federation in order to build a generation of yoga lovers, especially young people, to enjoy physical and mental health.”
 Almarwaai said that the committee seeks to increase the number of practitioners and build yoga teams that participate in local and regional yoga championships.  

Continue Reading

News Plus

Astronomers map distances in the largest-ever catalog to 56,000 galaxies

Published

on

Astronomers have assembled the largest-ever compilation of high-precision galaxy distances, called Cosmicflows-4.
Galaxies, such as the Milky Way, are the building blocks of the universe, each comprised of up to several hundred billion stars. Galaxies beyond our immediate neighbourhood are rushing away, faster if they are more distant, which is a consequence of the expansion of the universe that began at the moment of the Big Bang. Measurements of the distances of galaxies, coupled with information about their velocities away from us, determine the scale of the universe and the time that has elapsed since its birth.
“Since galaxies were identified as separate from the Milky Way a hundred years ago, astronomers have been trying to measure their distances,” said Tully, adding, “Now, by combining our more accurate and abundant tools, we are able to measure the distances of galaxies and the related expansion rate of the universe and the time since the universe was born.”

Continue Reading

News Plus

Shah Rukh Khan features on Burj Khalifa again, fans elated

Published

on

Dubai’s iconic skyscraper, Burj Khalifa, lit up with Bollywood superstar Shah Rukh Khan’s message on Wednesday evening. The world’s tallest building screened a campaign video for Burjeel Holdings, one of the private healthcare operators in the UAE. In the video, SRK is seen promoting the brand in his special way.
After seeing images and videos of the Burj Khalifa lighting up with SRK’s video, fans became extremely happy. They even started trending him on Twitter.
The musical fountain at #BurjKhalifa first played music from #ShahRukhKhan’s Om Shanti Om, and later the Burjeel Holdings campaign featuring King Khan was shown on Burj Khalifa! Truly the world’s biggest superstar,” a tweet read on one of the fan pages of SRK.
“Megastar Shah Rukh Khan featured on Burj Khalifa again, truly a KING,” a fan wrote on Twitter.
Reportedly, it’s for the fourth time that SRK has appeared on Burj Khalifa.
In 2021, the Burj Khalifa honoured Shah Rukh on his 56th birthday. The Burj Khalifa was lit up with the name of the actor to honour the actor on his birthday in 2020 as well.
On the work front, Shah Rukh is all set to make his silver screen return after four years with ‘Pathaan’, which also stars Deepika Padukone and John Abraham in the lead roles. The action-packed film is scheduled for release on 25 January 2023.
Apart from ‘Pathaan’, SRK will also be seen in upcoming film ‘Dunki’.

Continue Reading

Legally Speaking

SC to begin hearing 300 oldest cases from Oct

Published

on

By

NO RIFT, ALL JUDGES ARE ON THE SAME PAGE: CJI U.U. LALIT

In an effort to resolve pendency of cases in the Supreme Court, Chief Justice of India Uday Umesh Lalit issued orders on Wednesday asking that 300 of the oldest cases from October be listed for hearing.

The oldest such pending case dates back to 1979, and over 20 cases are from the period of 1990 to 2000.

The notification released by the Registry of the Supreme Court on Wednesday said, “Take notice that 300 oldest after notice matters of which list is appended below are likely to be listed before the courts on non miscellaneous days beginning Tuesday, October 11, 2022.”

The cases that will be listed also include a PIL that was filed in 1985 by lawyer and environmental activist MC Mehta and kept languishing in the Supreme Court’s records for almost 37 years. Most of the cases have either lost their significance as a result of the passage of time or because the immediate issue they attempted to address in their petitions was resolved long ago. However, these petitions persisted in the SC docket, increasing the Supreme Court’s statistics on cases still pending.

As of September 1, the Supreme Court has 70,310 cases outstanding, according to information posted on the court’s website.

The Chief Justice of India’s most recent ruling is a continuation of his efforts to clear out old cases and Constitution bench cases from the court system. Every Tuesday, Wednesday, and Thursday since becoming CJI on August 27, Justice Lalit has scheduled normal issues, which are older cases that have been lingering for more than ten years, in the morning session while the second half of the day is reserved for hearing of new matters.

To handle the majority of the 493 Constitution Bench cases (including connected cases) in the top court, CJI Lalit also formed five separate Constitution Benches, each with five judges. Of these, 343 are five-judge bench matters, 15 are seven-judge bench matters, and 135 are nine-judge bench matters.

Continue Reading

Nation

“Hope the US visa backlog will be resolved…” : S. Jaishankar

Published

on

By

India’s ‘mission’ for a permanent UNSC seat gets a fillip at UNGA

S. Jaishankar, the minister of external affairs, stated on Thursday that he hopes the backlog of US visa applications will be resolved and that India is ready to provide the necessary assistance, but that the US should mainly address the issue. He brought up the matter with US Secretary of State Antony Blinken, who gave him the assurance that the US was working to reduce the backlog of Indian nationals applying visas and that the Biden administration will soon put its new strategy into action.

“In India, I mean, there are families who are not able to meet their relatives there and people who can’t keep their business appointments. There are students who are waiting for a long time. So, it’s a really it’s a genuinely serious problem of some magnitude,” Jaishankar said.

“But I’m very confident, with the sincerity that Secretary Blinken showed and the seriousness with which I hope they would address this and with any support that we can provide, we hope that things will improve,” Jaishankar added.

According to the US State Department website, the wait time for Indians seeking a visiting visa to the US has increased to 800 days. For other non-immigrant visas as well as student/exchange visitor visas, the waiting time is close to 400 days.

“I’m extremely sensitive to this,” said Blinken as he blamed the Covid-19 pandemic for the backlog. “Our ability to issue visas dropped dramatically during Covid. And the last thing we want to do is make that any more difficult. On the contrary, we want to facilitate it. So bear with us. This will play out over the next few months but we’re very focused on it,” Blinken said.

Continue Reading

Trending