1.1 Current Outlook
A day after the Law Commission of India released its report entitled 'Legal Framework: Gambling and Sports Betting Including in Cricket in India ("Report"), the Commission released a press note stressing that its recommendation was to ban betting and gambling in India. However, if the Central Government or State Governments did consider regulating it, the Report set out some positive and logical measures to combat certain industry issues. The Report is under consideration by the Government.
On the heels of the Report, the Sports (Online Gaming and Prevention of Fraud) Bill, 2018 ("Sports Bill") was introduced as a private members bill in the Lok Sabha, on 28 December 2018. The Statement of Objects and Reasons accompanying the Sports Bill has underscored that it has been introduced with the dual aims of preserving integrity in sports and introducing a regulatory regime for online sports betting.
However, the Sports Bill lapsed with the dissolution of Parliament prior to general elections, and has not been reintroduced.
The All India Gaming Federation (AIGF), a self-regulatory body for online games of skill has written to the Prime Minister of India demanding that the Enforcement Directorate investigate and take action against offshore betting websites that are illegally offering websites to Indian citizens and accepting bets from India, in contravention of the Information Technology Act, 2000 ("IT Act") and the Foreign Exchange Management Act, 1999 ("FEMA").
As stated above, 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 ("Geeta Rani Case"). 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.
Insofar as poker is concerned, an appeal is pending against the judgment of the High Court of Gujarat, which has held that poker is a game of chance/gambling activity.
Furthermore, the Telangana Gaming Act, 1974 ("Telangana Act") was recently amended to delete the exception for games of skill. The Telangana Gaming (Amendment) Act, 2017 ("Amendment Act") is currently being challenged before the High Court of Hyderabad.
In the case of Ramachandran K v The Circle Inspector of Police, the Kerala High Court has held that playing rummy for stakes would amount to the offence of gambling under the Kerala Gaming Act, 1960 ("Kerala Act"). Previously, in the landmark judgment of State of Andhra Pradesh v K Satyanarayana, the Supreme Court had held that 13-card rummy was mainly and preponderantly a game of skill. A review petition was filed against the order of the Kerala High Court, but was dismissed. The court held that whether rummy played for stakes would amount to gambling would have to be decided on a case-by-case basis. A court would need to consider the manner in which the games were conducted online, and what stakes were involved.
In a case before the High Court of Delhi, a petitioner has sought a complete ban on online gambling websites from operating in India (both Indian and foreign). The petitioner has sought certain directions from Government entities that taxes are recovered from persons engaged in such gambling activities, and that violations of FEMA are checked. This petition is targeted only at games of chance, and has named poker, nap, sports betting, fantasy sports and election result prediction-related games as an illustrative list.
As per news reports, another public interest litigation case has been filed before the High Court of Delhi seeking a complete ban on poker and similar card games, played online and offline. The petition has also reportedly sought a ban on the advertising of such games.
1.2 Recent Changes
As stated above, a review petition was filed against the order of the High Court of Kerala in the matter of Play Games 24X7 Pvt. Ltd v Ramachandran K & Anr. However, the court dismissed the petition, and held that whether playing rummy for stakes (including online rummy) would amount to a violation of the Kerala Act would have to be assessed on a case-by-case basis.
The dismissal of the review petition has called into question whether any games of skill can be played for stakes.
Certain self- regulatory gaming bodies in India have adopted skill charters and guidelines to ensure player protection, transparency measures, etc.
2. Jurisdictional Overview
Betting and gambling is a state subject under the Constitution of India so each state has the exclusive legislative competence to enact laws relating to betting and gambling within the state. The Public Gambling Act, 1867 (PGA) has been adopted by certain states in India, while other states have enacted their own legislation to regulate betting and gambling activities within the state ("State Enactments").
The PGA and most of the State Enactments (collectively, "Gaming Enactments") were enacted prior to the advent of virtual/online gambling and therefore primarily prohibit gambling activities taking place within physical premises, defined as a "common gaming house".
Betting on games of chance is prohibited under most Gaming Enactments. As stated above, 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. ("Geeta Rani Case").
In the case of Dr. K R Lakshmanan v State of Tamil Nadu ("Lakshmanan Case"), the Supreme Court held that betting on horse racing was a game of skill. Accordingly, betting on horse racing is treated as a game of skill and is exempt from the prohibitions under most Gaming Enactments.
Most Gaming Enactments have carved out an exception for "wagering or betting upon a horse-race" from the definition of gaming/gambling ("Horse Racing Exemption"). However, the Horse Racing Exemption is subject to certain conditions under the Gaming Enactments, such as when wagering or betting takes place on the day on which the horse has run, in an enclosure that has been sanctioned by the State Government, etc. In the case of online horse racing, it would be difficult for these conditions to be met. However, one can explore arguing whether a horse racing product is a game of skill independent of the Horse Racing Exemption.
Depending upon the format, bingo may fall within the definition of a "lottery" or under the general definition of betting/gambling under most Gaming Enactments, as it is a game of chance and is prohibited in most Indian States. See below for a discussion on lotteries.
Casino games are predominantly chance-based, so are treated as betting and gambling activities, and are therefore prohibited under most Gaming Enactments. This applies for both digital and land-based casino gaming.
The Sikkim Online Gaming (Regulation) Act, 2008 ("Sikkim Online Act") covers certain casino games, such as Roulette, Casino Brag and Blackjack, which may be offered through the state-wide intranet within the State of Sikkim only
Under the Lotteries (Regulation) Act, 1998 and the Lotteries (Regulation) Rules, 2010 ("Lottery Laws"), State Governments are empowered to organise, conduct and promote lotteries, subject to certain conditions.
Some states regulate physical lotteries (such as Sikkim), and lotteries have been banned in certain states (such as Madhya Pradesh). Some states specifically provide for online lotteries (such as Punjab).
The State Governments are empowered to appoint individual or corporate entities as "distributors" or "selling agents" to market and sell lotteries on behalf of the organising state under the Lottery Laws.
Section 294 A of the Indian Penal Code, 1860 (IPC) specifically prohibits private lotteries. Certain states have repealed Section 294 A of the IPC and enacted their own legislation banning lotteries other than non-profit lotteries (such as the States of Andhra Pradesh, Gujarat, Karnataka, Maharashtra, etc). Certain other states have introduced legislation expressly banning lotteries in their states (eg, the State of Bihar vide the Bihar Ban on Lottery Act, 1993).
Certain versions of fantasy sports games can be argued to be preponderantly skill-based games in the Indian context. Accordingly, such games can be treated as exempted under the Gaming Enactments.
The High Court of Punjab and Haryana held Dream 11's format of fantasy sport to be a game of skill in the case of Shri Varun Gumber v UT of Chandigarh & Ors. ("Varun Gumber Case"). Thereafter, the High Court of Bombay also recognised that the same format of fantasy sport was a game of skill in Gurdeep Singh Sachar v Union of India.
The Nagaland Prohibition of Gambling and Promotion and Regulation of Online Games of Skill Act, 2016 ("Nagaland Act") expressly recognises virtual team selection games and virtual sport fantasy league games as games of skill. If such games are sought to be offered online in the State of Nagaland, a licence would be required.
Social gaming refers to those games in which no prize is offered. When there is no prize of money or money's worth offered, the game is typically not considered to be gambling under the Gaming Enactments. Depending upon the format and content of such games, certain other laws could be triggered, such as the intellectual property laws, and laws prohibiting certain types of content, such as the IPC or the IT Act, which prohibits obscene content, or the Indecent Representation of Women (Prohibition) Act, 1986 (IRWA), which prohibits depicting women in a derogatory manner.
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