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PUBLIC GAMBLING LAW IN INDIA

Monday, May 04, 2015

Gambling has existed in India for longer than history accounts. There is a mention gambling board and dice in Ramayana which dates back to 430 BC. By the 15th century legal gambling houses sprung up across India. These were regulated by the local ordinance to ensure the games were fair and orderly. This wasn't done for the protection of the players, but for the players to willingly submit their dues to the king.


According to List II Entry 34 of the Constitution of India- “‘Gambling’ includes any activity or undertaking whose determination is controlled or influenced by chance or accident and any activity or undertaking which is entered into or undertaken with consciousness of the risk of winning or losing (e.g. prize competitions, a wagering contract) … where there is no actual transfer of goods but only payment or receipt of the difference according to the market price, which varies from the contract price“.


Public Gambling Act, 1867 prohibits the activity of gambling. This central legislation defines gaming houses and declares gambling illegal where it is being done as a business to earn profits. Section 3 of the Act pertains to Casinos/gaming house and states that - “any house, walled enclosure, room or place in which cards, dice, tables or other instruments of gaming are kept or used for the profit or gain of the person owning, occupying, using or keeping such house, enclosure, room or place, or otherwise”. It cannot be interpreted to mean a house in which articles used as a means or appurtenance of, or for the purpose of carrying on, or facilitating gaming are kept or used for the purpose of carrying on or facilitating a gaming. [AIR 1922 All 61 (62): 23 Cri LJ 196 (DB)].


Section 12 of the Act provides the criteria for declaring any game as illegal i.e whether it is based on chance or skill. Skill based games, wherever played are not illegal. In MJ Shivani v. State of Karnataka, Supreme Court ruled that games where the element of chance is predominant fall under the category of gamble. Ardent Indian gamblers argue that ‘Poker’ is a skill based game and hence does not fall under the purview of the Act. But the legal position is still uncertain.


The Public Gambling Act of 1867 prohibits running or being in charge of public gaming house. The penalty of breaking this law is a fine of Rs 200 or imprisonment of up to 3 months. Besides this, the Act prohibits visiting gambling houses. A fine of Rs 100 or imprisonment up to a month is the penalty. The Information Technology Act 2000 regulates cyber activities in India and prohibits publication or transmission of information that can corrupt people. This includes online gambling and the punishment for such activities is much more serious than for offline gambling operations- the fine is Rs 100,000 or imprisonment of up to 5 years.


In Dr. K.R. Lakshmanan v. State of Tamil Nadu and Another (1996 AIR 1153), the Rummy or Paplu was again recognized as a game of skill by the Supreme Court. In Dr. K.R. Lakshmanan v State of Tamil Nadu and others [1968 AIR 825 1968 SCR (2) 387] the court held the game of Rummy to be a game of mere skill on the following reasoning:


“We are also not satisfied that the protection of Section 14 is not available in this case. The game of Rummy is not a game entirely of chance like the 'three-card' game mentioned in the Madras case to which we were referred. The 'three card' game which goes under different names such as 'flush', 'brag' etc. is a game of pure chance. Rummy, on the other hand, requires certain amount of skill because the fall of the cards has to be memorised and the building up of Rummy requires considerable skill in holding and discarding cards. We cannot, therefore, say that the game of Rummy is a game of entire chance. It is mainly and preponderantly a game of skill. The chance in Rummy is of the same character as the chance in a deal at a game of bridge. In fact, in all games in which cards are shuffled and dealt out, there is an element of chance, because the distribution of the cards is not according to any set pattern but is dependent upon how the cards find their place in the shuffled pack. From this alone it cannot be said that Rummy is a game of chance and there is no skill involved in it.” The grey area here is that Teen Patti and Texam Hold’em is banned and Rummy is legalized.


Extending the arguments used by the Hon’ble Supreme Court in these two decisions and using statistical analysis by various poker experts including David Sklansky (the author of the bestselling book “The Theory of Poker”) and others, it can be appropriate to say that no game of poker can be won without a certain degree of intellect, analytical skills and understanding of the game and thus requires a very high degree of skill. Those amateurs who are of the opinion that poker is a game of luck can try and play some games with experienced professionals and lose their stakes. This degree of intellect and skill will not be required in roulette, lottery or other slot games and everyone (experienced or not) would stand an equal chance of winning.


Lottery, another form of gambling, is legal in many Indian States. The Central Lotteries (Regulation) Act 1998 gave State Government the authority to hold lotteries and restricted it to maximum of one draw per week. But this is not followed as the States believe that they have the right to create their own laws for all forms of gambling and they don’t need the Central Lotteries Act to do so.


Casino Gambling, the most popular form of Gambling is allowed only in two states i.e. Goa and Sikkim. There is one casino in Sikkim and twelve in Goa, out of which seven are land based and five are floating casinos that operate on the Mandovi River. As per Maharashtra casinos Act, 1976, licensed casinos are allowed in the state.

Online Gambling is in its infancy in India, but Sikkim planned to offer three online gambling licenses in 2010. This failed despite India being the most sought out country for online gambling. Sikkim also permits an online lottery, operated by Playwin, which takes bets from players throughout India. In May 2011 India passed the Federal Information Technology Act which tries to supress internet gambling. This new act, which covers gambling sites, holds the Internet Service Providers responsible for blocking offshore betting sites.


Gambling in India is heavily restricted. Despite this an estimated 40% of internet users in India visit gambling sites primarily for lottery, cricket and horse betting fix. The Indian Gambling market is estimated to be worth US$ 60 billion per year which about half is illegally bet. Legal gambling in India is limited to betting on horse racing and lotteries only. But our gut feeling is that more legal gambling is coming to India soon; however, regardless if it does or does not come, the one thing that is for certain is – Indians are not going to stop gambling. And the biggest fact to support this statement is that even after the penalties and punishments mentioned in Public Gambling Act illegal gambling is still being practiced and more than half of the money generated in gambling is illegal.


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