DR.

RAM MANOHAR LOHIYA NATIONAL LAW

UNIVERSITY, LUCKNOW

2017-2018

LAW AND MORALITY

Topic: “Gambling Laws in India: Keeping up with the Technological
Advancements”

SUBMITTED BY: SUBMITTED TO:

Sanjeev Jothi Prof. Vikas Bhati

Roll No. 116 | Enrollment No. 140101116 Assistant Professor (Law)

B.A. LLB (Hons.), Semester IX Dr. RMLNLU, Lucknow

SIGNATURE OF STUDENT SIGNATURE OF TEACHER

 ~ Law and Morality ~

ACKNOWLEDGEMENT

On the very outset of this project, I would like to extend my sincere and heartfelt obligations
towards all people that have helped me in this endeavour. I am indebted to Prof. Vikas Bhati
for his continuous guidance and for being such a great mentor to me. I am extremely thankful
to the Librarian and the faculty present at the library who have enabled me to pursue my
research efficiently. I also acknowledge with a great sense of reverence, my gratitude towards
my parents who have supported me both morally as well as economically. And last but not
the least, my gratitude goes to all my friends and seniors, who have directly or indirectly
contributed in helping me finish this project. I also thank God Almighty without whom this
project would never have achieved fulfillment.

Sd/-

Sanjeev Jothi

Page 2 of 24
 ~ Law and Morality ~

TABLE OF CONTENTS

INTRODUCTION ................................................................................................................ 4

INDIAN HISTORY BEHIND GAMBLING ......................................................................... 6

OVERVIEW OF THE LAW OF GAMBLING IN INDIA .................................................... 8

Online Gambling ............................................................................................................... 9

Casinos ........................................................................................................................... 10

Lotteries .......................................................................................................................... 10

Horse Racing ................................................................................................................... 10

MORALITY AND GAMBLING ........................................................................................ 11

SKILL VERSUS CHANCE: A JUDICIAL PERSPECTIVE ............................................... 14

JUDICIAL PERSPECTIVE OF ONLINE GAMBLING ..................................................... 16

Clarity on Fantasy Sports being a ‘Game of Skill’ ........................................................... 17

POLICY EFFORTS FOR LEGALIZING BETTING AND GAMBLING ........................... 19

CONCLUSION ................................................................................................................... 21

BIBLIOGRAPHY ............................................................................................................... 23

Page 3 of 24
 ~ Law and Morality ~

INTRODUCTION

Games, whether in the form of gambling, or popular social or casual games, are enjoyed by
people of all age groups across the globe for their entertainment value. In fact, gambling,
irrespective of its many vices, has been a part of the Indian culture since time immemorial.
Even before the six side dice was invented, Indians used the nuts of the Bibhitaki tree as dice.
References to gambling can be traced to the Mahabharata, one of India’s oldest mythological
epics, in which the opponents were tested based on their skills at board and dice games rather
than through wars. The gaming industry has witnessed a paradigm shift with the evolution of
television, digital and online gaming models. Following the increased internet penetration in
the mid-1990s, from being targeted at academics to being used by the general population,
internet-based online games gained popularity. The Digital India drive under the aegis of the
Modi government has led to improving the infrastructure as a whole. Better internet speed
even in the remote areas has led to more consumption of content even where the mass
population resides i.e. the rural areas. Post demonetization, the digital online payment
systems received a boom with a larger part of the population being incentivized and
compelled to use the same. All these factors add to the huge potential of the market in India
and has led to a surge in the number of online gaming sites over the last few years. The
popularity of online gambling is best evidenced by the rapid growth of in the popularity of
online card games, like Poker and Rummy and new age games like fantasy sports.

Mobile and online models received further impetus in India by the telecom revolution,
penetration of internet and cable in substantial parts of the country, and the increasing
popularity of new media with the masses. This huge size of the potential market in India has
led to a surge in the number of online gaming sites over the last few years. The impact is
evident by the rise in demand for quality game content, game developers, game developing
companies and the gaming industry in general. Gaming as a whole is gaining increasing
significance as a major source of income and a profitable business venture worldwide. In a
recent study by KPMG India and Google dated May 2017, it suggests that the Indian online
gaming industry is set to become a USD 1 billion industry by 2021. 1 There has been
considerable increase in the Indian betting market which can be evidenced from the report

1
Online Gaming in India: Reaching a New Pinnacle, A Study by KPMG in India and Google, Available -
https://assets.kpmg. com/content/dam/kpmg/in/pdf/2017/05/online-gaming.pdf.

Page 4 of 24
 ~ Law and Morality ~

issued by International Centre for Sports Security (“ICSS”), where ICSS claims that the
betting market in India could be worth over US$130 billion. Given the high growth potential
of the gaming industry in India, many foreign entities are exploring possibilities to set up
operations here. Similar trends are reflected in many industry related research reports which
say that several global gaming firms have opened offices in India or have signed distribution
agreements with leading Indian mobile game developers in order to distribute their products
in India. While operating gaming businesses is easier in some countries of the world 2 where
gaming is legal, the situation is not so easy in India where the laws are stringent.

With the advent of social and casual games both offline and online, the ‘gaming’ industry can
now be said to comprise of 2 verticals – gambling in both traditional and online forms, and
skill based social or casual gaming. In this paper, I discuss the scope of gambling / gaming
laws and the evolution of the gambling / gaming industry in India. To clarify, in this paper, I
have used the term ‘gaming’ to refer to social and casual gaming. However, under certain
Indian laws, gambling activities are referred to as ‘gaming’, and specific references to the
same may be included in this paper.

2
A few examples include Macau, Nepal, U.K. etc.

Page 5 of 24
 ~ Law and Morality ~

INDIAN HISTORY BEHIND GAMBLING

Gambling in ancient India was always regarded as a social activity for amusement whether it
be in celebrating special occasions or daily lives. Remains of dice and gambling boards were
traced at Harappan excavations proving its existence since 1000 BC3. Even the Rig Veda
contains a hymn called “Gambler‘s Lament” showing its popularity during the early
IndoAryan society.4 In fact each side of a four sided dice was named after the four yugas of
the world as per the Hindu mythology. The famous episode in Mahabharata where the royal
king Yuddhirstha lost his kingdom including his brothers and wife in a dice game showed the
compulsive gambling behaviour. In Manusmriti, Verse 221, Gambling has been strictly
forbidden in entirety for its potential to destroy a Kingdom.5 It also provided for punishment
for anyone who either plays or provides an opportunity for it. Punishment could eitherextend
to getting banished from the kingdom or corporal subjugation. Though Manu advised
complete ban on gambling, a different strategy was suggested by Kautilya who advocated
State control of gambling because of the revenue that the King could earn from it. In fact,
even though from ancient time, gambling was regarded as the destroyer of truth, honesty and
wealth, it somehow could not be completely flushed out from the society.

With the efflux of time and the development of the legal system, the gambling laws in India
have also taken its own course. Initially during the British rule, Section 290 of Indian Penal
Code of 1860 was the only provision under the criminal law, which could prohibit any
gambling activity, provided it was affecting and upsetting the public interest. These vague
parameters of controlling gambling led to the passing of the Public Gambling Act in the year
1867. The initial purpose of this Act was to repress public gambling in large towns situated in
the territories respectively under their governments, without giving rise to oppression and
other malpractices on the part of the police. 6

3
Jan McMillen, Understanding Gambling- History, Concept and Theories,
http://books.google.co.in/books?id=iekF9X3OwwMC&pg=PA34&dq=gambling+history+in+india&hl=en&sa=
X&ei=PwlOVInHCJPf8AXTtIFI&ved=0CCEQ6AEwAQ#v=onepage&q=gambling%20history%20in%20india
&f=false.
4
A Brief History of India, Judith E. Walsh, available at
http://books.google.co.in/books?id=iekF9X3OwwMC&pg=PA34&dq=gambling+history+in+india&hl=en&sa=
X&ei=PwlOVInHCJPf8AXTtIFI&ved=0CCEQ6AEwAQ#v=onepage&q=gambling%20history%20in%20india
&f=false.
5
Justice Rama Jois, Legal and Constitutional History of India: Ancient legal, Judicial, and Constitutional
System, 1st Edition, 2016, Universal Law Publications.
6
A.P. Mathur, Commentaries on Gambling Acts in India, Eastern Book Company Law Publishers &
Booksellers, pg. 1, Delhi, 1967.

Page 6 of 24
 ~ Law and Morality ~

In short, the objectives of the Act are as follows:

i. To prevent gambling either in a public place or thoroughfare or in a common gaming

house,
ii. To prevent the keeping of common gaming houses.

Under the following statute, gambling would become an offence only when it is played for a
private gain in a “common gaming house” or for the gain of the gambling house keeper. The
Supreme Court with lot of precision has dealt with the issue of games which are distinguished
on the basis of skill from chance. Games of chance have been strictly prohibited by law and it
is the game of skill which are allowed to continue.

Being under List II under the 7th schedule of our Constitution, 7 it clearly gives the autonomy
to the states to decide upon its legal status as to whether there should be a complete
prohibition or regulation of the same. Lately, Gambling like any other activity has
transcended the physical boundary of territories and participants from various jurisdictions.
The legality of online gambling is depended on the Information Technology Act, 2000 and
the Information Technology (Intermediary) Rules, 2011 which vaguely discusses the liability
of the intermediaries and the activities which could morally deprave the minds of the users.
The discussion on cases would show the various tests which have been evolved to put
restrictions on certain games i.e., game of chance and how a game can be determined to be a
game of skill or luck. Having a specific law regarding either prohibition or regulation of
online games would clarify the doubts in this domain. The paper thereby highlights the
loopholes when gambling enters virtual realm and how complete prohibition as an idea is a
farce. I would make an attempt to give certain suggestions to regulate gambling and betting in
India. The conclusion therefore, focuses on the suggestions which are put forward to analyse
the current scenario and assist the legislature to shape the laws accordingly.

7
Entries 34 & 62.

Page 7 of 24
 ~ Law and Morality ~

OVERVIEW OF THE LAW OF GAMBLING IN INDIA

Over the years the concept of gambling has been subject to numerous onslaughts and
scrutiny, questioning its legality and as to what extent it can be termed as permissible. Indian
courts and legislations have always considered gambling to be a pernicious and immoral
activity. They have consistently been held by courts to have a negative impact on the
economy as it affects the public interest at large by causing people to take ill-advised
decisions and end up losing their precious savings in the process. Therefore, both the
judiciary and the legislature have always discouraged the public from humouring in games of
chance and probability. But before we arrive at any conclusion, it would be appropriate to
examine the respective laws and extrapolate their criteria. As has been mentioned above, the
Public Gambling Act of 1867 was one of the primary legislative enactments introduced
during the British era with an intention to prohibit gambling activities in India. This Central
legislation, which dates back to 146 years, defines common gaming houses and declares the
activity of gambling to be illegal when it is being done as a business to earn profits. It also
makes operating a gambling house, assisting in the operation of a gambling house, visiting a
gambling house (whether participating in the activity of gambling or not), financing gambling
and being in possession of gambling devices- a crime. The penalty is a meagre fine not
exceeding Rs. 200/- or up to three months in prison. As of date though, there is no record of
any person being officially charged or sought after for betting. Reference to the Public
Gambling Act explicitly states that nothing in this Act shall apply to games of mere skill
wherever played. It can be implied from this that, in absence of other laws against them,
wagering on games of skill is legal. We shall deal with this issue in detail at a later stage in
this article.

Since this Act is a pre-constitutional Act, it would only be appropriate if we elucidate and
find out the constitutional framework of gambling and as to who has the power to make these
laws. According to Entry No. 34 of List II of 7th schedule 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.”

Page 8 of 24
 ~ Law and Morality ~

Therefore, according to the abovementioned Entry No. 34 of List II of the 7th Schedule of the
Indian Constitution, the legitimate authority and right is vested with the individual States to
make the appropriate laws with respect to gambling and betting. In fact, Entry No. 62 has
conferred authority to the States to tax gambling and betting events or activities. Recently, the
states of Goa and Sikkim have legitimized and regulated gambling and its forms, while
around 13 states have legalized lottery. Otherwise in general, the majority of the States have
categorized gambling as an illegal activity and therefore is punishable under law. In fact, after
the Constitution came into force post-independence, there were various states which have
enacted their own laws pertaining to gambling and betting. Various States have adopted the
Public Gambling Act vide Article 252 of the Constitution to their respective territories, which
empowers the parliament to legislate for two or more states by consent and adoption of such
legislation by other states. Therefore, the significance of the Public Gambling Act still
remains potent and relevant in certain states. At present though, by the Adoption of Laws
Order, 1950 the jurisdiction of the Public Gambling Act is now limited to Uttar Pradesh,
Punjab, Delhi, Himachal Pradesh and Madhya Pradesh. The Act therefore, applied only to
these states with amendments promulgated by the states.

Online Gambling
The Gambling Legislations were introduced before the emergence of the internet. Therefore,
the provisions of these laws do not expressly contemplate online gambling. The states of
Sikkim and Nagaland are the only states to have adopted specific legislation that permits and
regulates online gambling, namely the: ƒ

 Sikkim Online Gaming (Regulation) Act 2008 (“Sikkim Gambling Law”) was passed
on June 28, 2008 with the dual objects of controlling and regulating online gaming
through electronic or non-electronic formats, and imposing a tax on such games in the
State of Sikkim. The Sikkim Online Gaming (Regulation) Rules, 2009, were
subsequently passed on March 4, 2009 (and the same have been amended from time
to time). ƒ
 Nagaland Prohibition of Gambling and Promotion and Regulation of Online Games
of Skill Act 2015 and the Nagaland Prohibition of Gaming and Promotion and
Regulation of Online Games of Skill Rules 2016 (“Nagaland Gambling Law”), which
regulate games of skill such as chess, sudoku, quizzes, binary options, bridge, poker,
rummy, nap, spades, auction, solitaire, virtual golf and virtual racing games.

Page 9 of 24
 ~ Law and Morality ~

Further, the state of Telangana has amended the Gambling Legislation applicable to
Telangana as an amendment to the legislation, which inter alia, expands the scope of offences
to apply to the online medium as well.

Casinos
The Gambling Legislations regulate casinos in India. The Gambling Legislations of Goa,
Daman & Diu8 and Sikkim9 allow gambling to a limited extent, under a license, in five star
hotels. In Goa, the law also permits casinos on board an offshore vessel.

Lotteries
Under the Constitution of India, the central legislature has the power to enact laws with
respect to lotteries.10 Lotteries have been expressly excluded from the purview of the
Gambling Legislations and are governed by the central law - Lotteries (Regulation) Act, 1998
under which the Lottery (Regulation) Rules 2010 (“Central Lottery Laws”) and state
specific rules have been framed (“Lottery Laws”). The Central Lottery Laws allow the state
governments to organize, conduct or promote a lottery, subject to the conditions specified in
the Central Lotteries Laws. The state governments may appoint an individual or a corporate
as a “distributor or selling agent” through an agreement to market and sell lotteries on behalf
of the organizing State. While some states such as Punjab, have gone to the extent of
specifically providing for and approving online lottery systems to be governed by the state
Lottery Laws, lottery is banned in certain states in India, for example Madhya Pradesh.

Horse Racing
Horse racing has been given a special status under the Gambling Legislations. Most
legislations specifically exclude betting on horse races from within their purview, subject to
certain conditions. In K R Lakshmanan vs State of Tamil Nadu11 (“Lakshmanan Case”), the
Supreme Court held that betting on horse racing was a game of skill since factors like fitness,
and skill of the horse and jockey could be objectively assessed by a person placing a bet. The
analysis is interesting to note as this reasoning could possibly be used to justify other forms
of betting as games of skill, especially sports betting.

8
The Goa, Daman and Diu Public Gaming Act, 1976.
9
Sikkim Casinos (Control and Tax) Act, 2002 read with Sikkim Casino Games Commencement (Control and
Tax) Rules, 2007 and Sikkim Casino Games (Control and Tax) Amendment Rules, 2011.
10
Constitution of India, Seventh Schedule, List I, Entry No. 40.
11
K R Lakshmanan v. State of Tamil Nadu, AIR 1996 SC 1153.

Page 10 of 24
 ~ Law and Morality ~

MORALITY AND GAMBLING

India has been culturally opposed to gambling even though it existed in Indian society since
ancient times. The textual references also suggest that these activities have never been
approved by the society. The Government generally prohibits such activities to prevent
societal harm. The governmental policy may, not necessarily be in tune with existing social
values. Despite being illegal, there are a few activities that the public at large, continues to
indulge in. Illegal activities can be divided into two categories (A) activities, which definitely
cause damage to the society viz. trade in contraband substances, and (B) activities like
gambling and betting, which cause damage to the individuals but whose social impact
varies. 12 Whether the State has the right to regulate private morals, is a question that has often
underpinned gambling prohibition laws. J.S. Mill discussed the extent to which State should
be allowed to restrict liberty of individuals and highlighted the conflict between liberty of
individuals to carry trade of their choosing and be involved in desired activities and the effect
of such choice on the society at large. While he was indecisive on the justifiability of
prohibiting activities like gambling, he implicitly recognised the need for regulation of those
activities that may cause harm to others. He remarked:

A person should be free to do as he likes in his own concerns; but he ought not to
be free to do as he likes in acting for another, under the pretext that the affairs of
another are his own affairs. The State, while it respects the liberty of each in what
specially regards himself, is bound to maintain a vigilant control over his exercise
of any power which it allows him to possess over other. 13

Those who argue in favour of legalising gambling, give primacy to individual autonomy and
minimum State interference. Those who disfavour it, argue that immorality is a justifiable
ground for restricting individual liberty, as such restrictions help in maintaining societal order.
Arguments made in favour of regulating gambling, call for dissociating morality from
gambling. It is believed that the connection between the two is merely derivative and

12
Nirod Kumar Palai, Sarojini Mishra, et.al., “Gambling v, State: A Study of Problems and Prospects of
Gambling Industry in India under Globalization Regime” XIV International Economic History Congress,
Helsinki (2006).
13
J.S. Mill, On Liberty and Utilitarianism (Bantom Classic, New York, 2008)

Page 11 of 24
 ~ Law and Morality ~

associative and therefore, by freeing the concept of gambling from unwelcome moral
negativity, it becomes easier to regulate it as an activity. 14

In the case of Guru Prasad Biswas & Anr. v. State of West Bengal & Ors. 15, the Calcutta High
Court remarked that betting and gambling activities affect a person’s morality and therefore
infringe the right to life guaranteed under Article 21 of the Constitution. In Gherulal Parakh
v. Mahadeodas Maiya & Ors.16, the Supreme Court observed:

The word ‘immoral’ is a very comprehensive word. Ordinarily it takes in every

aspect of personal conduct deviating from the standard norms of life. It may also be
said that what is repugnant to good conscience is immoral. Its varying content
depends upon time, place and the stage of civilisation of a particular society. In
short, no universal standard can be laid down and any law based on such fluid
concept defeats its own purpose.

The notion of morality involved in gambling can be distinguished from that in sports-
betting. Sports are ‘games of skill’ where tentative parameters like physical skills,
effort, strategy and tactics, essential purpose, etc. are also taken into consideration.
Gambling necessarily entails the determination of a result based on eventualities beyond
human control. In sports, however, determination of results are primarily based on skill
rather than chance. If in an event, substantial amount of skill is required to place the
bets, the argument of immorality of the activity does not survive.

Ideally, Constitutional morality should be the touchstone for justifying State

intervention. Offending public morality cannot be a ground for determining the legality
of an action. In 2002, the Haryana Assembly passed two Bills, namely the Public
Gambling (Haryana Amendment) Bill of 2002, which was an essential aspect of the
second Bill, i.e. the Haryana Casino (Licensing and Control) Bill of 2002 that called for
allowing Casino projects in Haryana. The Governor of Haryana had reserved the
Amendment Bill for the consideration of the President under Article 200 of the
Constitution of India. The Amendment Bill sought to add section 19 to the Public
Gambling Act, 1867 applicable to the State of Haryana with the purpose and objective

14
Harsimran Kalra, Abhishek Mukherjee, et.al., “Twited Willow, Gambling, Sport and Cricket in India” Hindu
Centre of Politics and Public Policy (2013) available
at:http://www.thehinducentre.com/multimedia/archive/01478/Issue_Brief_1478229a.pdf (last visited 31-05-
2018).
15
Guru Prasad Biswas & Anr. v. State of West Bengal & Ors, (1998) 2 Cal LT 215.
16
Gherulal Parakh v. Mahadeodas Maiya & Ors, AIR 1959 SC 781.

Page 12 of 24
 ~ Law and Morality ~

to allow casino projects as an instrument of infrastructural growth, attract global

investment, promote tourism and create employment opportunities. While the main
argument in favour of regulating the betting and gambling is revenue generation through
taxation on its proceeds, the question remains whether one can choose revenue over
morality. ‘Immorality’, per se, cannot be a ground to challenge the Constitutional
validity of an enactment as morality is a subjective concept. If, however, some form of
morality is reflected in any provision of the Constitution, for example, if an enactment
compromises the dignity of an individual, it may be challenged as being violative of
Article 21 of the Constitution. Additionally, if a custom or usage has been deemed
‘immoral’ by a particular demographic it may be challenged by them as such. It should
also be noted that morality and criminality are not coextensive.17 Morality is a ground
for imposing reasonable restrictions on individual’s freedom18. It is said that the law
remains in a state of flux while defining morality, for it is required that the law must
continuingly evolve to accommodate the needs of changing time.

17
S. Khushboo v. Kanniammal, AIR 2010 SC 3196.
18
Ramesh Yeshwant Prabhoo v. Prabhakar Kashinath Kunte &Ors., AIR 1996 SC 1113; See also, Bobby Art
International, etc. v. Om Pal Singh Hoon & Ors., AIR 1996 SC 1846; and Shri Raghunathrao Ganpatrao v.
Union of India, AIR 1993 SC 1267.

Page 13 of 24
 ~ Law and Morality ~

SKILL VERSUS CHANCE: A JUDICIAL PERSPECTIVE

Black’s Law Dictionary defines gambling or gaming as „the act of risking something of
value for a chance to win a prize 19, while a wager is defined as “money or other
consideration risked to an uncertain activity”. Indian gaming statutes have also drafted a
similar definition of “common gaming house.” For any activity to be considered as
gambling, the necessary and essential elements to constitute it would be mutual
consideration, chance and prize. To be charged for the offence of gambling, a person
need not necessarily be an active participant. In fact, the law goes so far as to make even
visiting a place where gambling is conducted as a crime. Therefore, if any individual
owns, occupies or uses a place for gambling, then the police have every authority to
search the premises, seize any adverse materials or gambling instruments and even
arrest all occupants participating in such gambling activities. The only respite for these
individuals would be if the games played are of skill and not of chance, then as per
Section 12 of the Public Gambling Act, games of skills are specifically excluded from
criminal prosecution. Therefore, absence of any of the abovementioned elements would
exclude such games and acts from the ambit of gambling, and thus would not be
considered a crime. Going by this analysis, it can thereby be implied that participating
or indulging in games of skills, where luck or chance has little or no relevance in
determining a winner would be deemed to be permissible in law and not punishable, as
the individual relies on his own skill rather than leaving things to chance. Therefore, at
present, there is no statute which explicitly prohibits or punishes participating in such
games of skill. 20

For a game to be categorised as gambling in India, it can be determined by examining as

to whether the game in concern is a game of skill or a game of chance. For arriving at
this though it is essential to determine certain aspects such as:

 What is a game of skill?

 Is it obligatory that there must not be any chance involved in the game?
 Does skill need to be primarily present in a game to deem it as a skill based
game?
 Or is it enough if skill is predominant over chance?
19
Black’s Law Dictionary 701 (2004).
20
Team, L. (2013). Gambling Laws in India!, LawLex, Available at: https://lawlex.org/lex-pedia/gambling-
laws-in-india/8590 [Accessed 12 Nov. 2018].

Page 14 of 24
 ~ Law and Morality ~

To answer the above questions, for a game to be considered a game of skill under Indian
law, the position has been so far that no game needs to be a skill based game in entirety,
but in essence should predominantly be a skill based game, i.e., the element of skill
should be more dominant than the element of chance.

In the case of State of Andhra Pradesh v. K. Satyanarayana & Ors.21 (“Satyanarayana

Judgment”), the SC specifically tested the game of rummy on the principle of skill
versus chance and held that Rummy was not a game entirely based on chance like the
‘three-card’ game (i.e. ‘flush’, ‘brag’ etc.) which were games of pure chance. It was
held that Rummy was a game involving a preponderance of skill rather than chance.
The SC based its conclusion on the reasoning that Rummy requires a certain amount of
skill as the fall of the cards needs to be memorized, and the building up of Rummy
requires considerable skill in holding and discarding cards. The chance element in
Rummy is of the same level as that involved in a deal in a game of bridge. In all games
in which cards are shuffled and dealt out, there exists an element of chance, because the
distribution of the cards is not according to a predetermined pattern, but is dependent
upon how the cards find their place in the shuffled pack. In this judgment the SC has
also passingly observed that bridge is a game of skill. Presently, there has been no case
in India where card games (apart from Rummy) have been tested against the principle of
skill versus chance.

In most jurisdictions, including India, the growing popularity of Texas Hold’em Poker
cannot be doubted. Though there is a lack of clear jurisprudence on this subject in India
presently, with different High Courts/ State Governments taking different views, there
appears to be an increasing trend internationally considering Texas Hold’em Poker as a
game preponderantly of skill, and not a game of chance alone, except in the states of
Gujarat and Telangana.

21
AIR 1968 SC 825.

Page 15 of 24
 ~ Law and Morality ~

JUDICIAL PERSPECTIVE OF ONLINE GAMBLING

The draftsmen while enacting laws with respect to gambling prior to the advent of
technology, regulated gambling only in the premises of a building or closed
construction. Reliance can be placed in the decision of Super Cassettes Industries Ltd. v
Myspace Inc. & Anr.22, to infer that if there are change in circumstances or any
introductions in technology, which were not perceived of while bringing out or
introducing a new law, then statutory interpretation suggests that this new change or
advancement in technology can be construed to be part of that existing law provided
they fall within the same genus. In fact, in that case the Court while interpreting of the
Copyright Act, 1957 held the word “Place” to include “Place on the internet”. The
principles of interpretation of statutes suggest that when there are new technological
inventions or change in circumstances, which were not in contemplation at the time
when the statute was enacted, the said invention or technological advancement may be
construed to be included in the existing enactment if they fall within the same genus, as
provided in the existing enactment.

With the development of online gaming a question can arise as to what would be the
situation when games of skill are played on virtual platforms. Can these games of skills
be offered for money or is there any restriction on taking stakes from games of skill on
websites making profit? This issue recently came up for deliberation before the New
Delhi District Court wherein a petition was filed under Section 36 of the Civil
Procedure Code, 1908 along with certain other questions involving the legality of games
of skill and online games for cash, the constitutional right to establish businesses of
games of skill, penal provisions relating to online gambling, advertising online gaming
and payment gateways for online games of skill.

The court while arriving at its conclusions held that Article 19(1)(g) of the Constitution
does not provide any protection to online games and are outside the purview of trade
and commerce. The court while interpreting the concept of the term “common gaming
house” declared that online gaming or offering online games of skill may fall within its
ambit and therefore, may attract criminal liability. A clear classification was made with
respect to games of skill when played in the physical form compared to those that were

22
2011(48) PTC49 (Del).

Page 16 of 24
 ~ Law and Morality ~

played in a virtual platform. The court though made no specific reference or

interpretations to any gambling laws for arriving at its conclusions.

While analysing the scope of the concept of the term “skill‟, the court restricted its
approach and defined six parameters for its analysis, which were ability, strategy,
physical co-ordination, technical expertise and lastly knowledge. By keeping these
parameters in mind the court arrived at the conclusion that even though games of skills
are declared to be legal and no bar can be placed on them from being played physically,
i.e. in “common gaming houses‟ for stakes or profits, per contra the same will not apply
if they are played on an online forum. This was held permissible for games of skill
played in an online forum when not played for stakes or profits and would therefore, be
legal as per Indian Law. The Courts reasoning was that the degree of chance increases
in online gaming and therefore the possibility of manipulation including randomness,
cheating, and collusion in the online space increases to a great extent, compared to when
played in a physical location. According to the Court, this would also imply then that
playing on an online forum offering real cash prices would make them no different from
physical casinos and therefore, has held that playing through a click of a mouse cannot
be included under the ambit of skill. Besides this reasoning the court also went onto to
hold that advertisement of any form on these online gaming sites are illegal and not
permitted in any form.

Clarity on Fantasy Sports being a ‘Game of Skill’

Under Nagaland Online Gambling Law, games of skill include games where the “skill lies in
team selection or selection of virtual stocks based on analysis”. This law also specifies that
virtual sport fantasy league games and virtual team selection games are games of skill, and
that games of skill can be virtual sports-based games. In 2017, the High Court of Punjab and
Haryana (“PH Court”) became the first and only Indian court to rule fantasy sport to be
predominantly skill-based (Shri Varun Gumber v. UT of Chandigarh & Ors.). The plaintiff in
this matter was registered as a player with the respondent company, Dream 11 Fantasy
Private Limited (“Dream 11”). He lost his bet of INR 50,000 while playing fantasy sports
tournaments offered by Dream 11. The plaintiff moved PH Court alleging that fantasy sports
was not based on skill and that Dream 11 was carrying on business covered within the
definition of ‘Gambling’ under the Gambling Legislation applicable to the state of Punjab.

Page 17 of 24
 ~ Law and Morality ~

The PH Court relied on the Supreme Court’s decision in K.R. Lakshmanan v State of Tamil
Nadu, which had held that betting on horse races was a game of skill. The PH Court
construed that the SC had held that competitions in which success depended upon a
substantial degree of skill were not gambling, and despite there being some element of
chance, if a game was preponderantly of skill, it would be a game of ‘mere skill’. The PH
Court reasoned that playing fantasy sports required the same level of considerable skill,
judgment and discretion. Hence, it was held that the element of skill predominated the
outcome of the fantasy game and fantasy games were of “mere skill” and could not amount to
gambling. Pertinently, the PH Court also held that since fantasy sports did not amount to
gambling, Dream 11 was conducting a business activity protected under Article 19(1)(g)7 of
the Constitution.

Page 18 of 24
 ~ Law and Morality ~

POLICY EFFORTS FOR LEGALIZING BETTING AND GAMBLING

The first instance when the Law Commission of India (“Law Commission”) was entrusted
with the task of simplifying and streamlining the Gaming Enactments was in 2014. This
culminated in the 20th Law Commission issuing a report titled “Obsolete Laws: Warranting
Immediate Repeal” – An Interim Report” (“2014 Report”).23 In the 2014 Report, the Law
Commission observed that the Public Gambling Act, 1867 was an obsolete law in need of
immediate repeal. Most of the State Enactments are based on the provisions of the Public
Gambling Act. Thus, it construed that the Law Commission acknowledged the need to
overhaul the outdated Gaming Enactments governing the industry in India. Thereafter,
following the developments in some highly- reported match fixing matters in India, the
Supreme Court appointed a three – member committee (“Lodha Committee”) to, among other
things, make recommendations necessary to prevent sports frauds and conflicts of interests in
the game.24 The Lodha Committee recommended the legalization of betting in cricket in their
report.

Following this, recently, the Law Commission headed by Justice B. S. Chauhan, a former
judge of the Supreme Court was mandated by the Government if India to make
recommendations on the possibilities of legalization of sports betting in India and the review
of Gaming Enactments with a view to provide for a Central licensing regime. The Law
Commission Report that came out recently, analyzes the need for legalizing betting in India.

As per the report, though land-based lottery and casinos still dominate the gambling market,
online gambling and betting are showing rapid growth. Such activities, if properly regulated
would ensure transparency in the market, as also strike at the underworld’s control over the
illegal and unregulated gambling industry. 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. Regulation would therefore, empower the authorised
agencies to identify and prevent instances of gambling by minors and ‘problem-gamblers’ as
well as save the public from any kind of inconvenience at the hands of the law enforcement
authorities. It would also enable the Government to effectively curb the menace of black-
money generation through illegal gambling. The Commission reaches the conclusion that,

23
Law Commission of India, Obsolete Laws: Warranting Immediate Repeal” – An Interim Report, September
12, 2014, available at: http://lawcommissionofindia.nic.in/reports/Report248. pdf
24
http://www.firstpost.com/sports/ipl-betting-full-text-of-lodhapanels-verdict-on-rajasthan-royals-and-csk
2342310.html

Page 19 of 24
 ~ Law and Morality ~

even though gambling and betting is not desirable, incapability to enforce a complete ban has
resulted in rampant increase in illegal gambling, resulting in a boom in black-money
generation and circulation. Thus, if Parliament or the State Legislatures wish to proceed in
this direction, the Commission feels that regulated gambling would ensure detection of fraud
and money laundering, etc. Moreover, they have provided their recommendations in the
report, mainly, Parliament being given the legislative competence to enforce laws on
gambling, Model Law being enacted by the Parliament, proper linkage to PAN Card,
sufficient safeguards to prevent match fixing.

Page 20 of 24
 ~ Law and Morality ~

CONCLUSION

As has been noted in the introduction of this article, it has been mentioned that betting and
especially gambling has always been viewed with a sense of social disproval and the reason
can be attributable to religious doctrines and philosophies, which explicitly prohibit them in
all forms. But with the advancement in law and certain principles laid down by the courts in
the country, a regularised version of gambling and betting is permissible. The online version
though as mentioned above is still a grey area. Many risks seem to arise while indulging in
either betting or gambling, one being the danger of unregulated and unscrupulous operators
being prejudicial to participants. Besides this, the young and susceptible are exposed to these
activities as well and this may in turn influence them to participate in such nefarious deeds
and very ill-advisedly bet or gamble in ways which are unwise and can become damaging to
their lives and those around them. In fact, resorting to such forms of betting or gambling may
increase the tendency for criminals to exploit betting them in various ways for their own
selfish needs.

The affiliation with sports betting has often had a negative and adverse implication in India,
with sports becoming more popular in terms of illegal operators and scandals where players,
bookmakers or teams have been involved in tax evasion, bribery, point shedding, disclosure
of confidential information, spot fixing and the like. Having noted the abovementioned
points, it can be stated that both betting and gambling in particular, have been present from
time immemorial and have now become a social constant without which no society in the
world today can survive or thrive without, even with the strictest and harshest of restrictions
and prohibitions placed on it

Having noted the above points, with the Internet still evolving, the legislature will need to
speed things up in ensuring new laws and regulations are introduced to tackle such activities.
The Indian Government can take a cue from the American Internet Gambling Prohibition Act
(Kyl's Bill), and implement specific laws to deal with the issue of Internet Gambling. But
having stated this, the Government is ill-equipped in countering online gambling with all the
technological advancements and legal problems. This can mainly be attributed to the
difficulty arising from tracking and locating gambling activities and also simultaneously
exercising jurisdiction over these operations. As most gambling and betting sites are located
offshore, i.e. well outside the jurisdiction of Indian Courts, it becomes near to impossible for
Page 21 of 24
 ~ Law and Morality ~

the Authorities to monitor and regulate them. It is legally permissible in those countries to
host these sites and subsequently, Indian laws can’t shut them down. Therefore, development
of appropriate laws is a pre-requisite in tackling this issue. In fact, at present, the Information
Technology Act is the only act which exercises extra territorial jurisdiction with respect to
computer related offences committed in India. The recent suggestions by the Law
Commission of India in introducing new reforms to do away with out dated laws such as in
gambling, betting and the like is definitely a positive step in bring about a systematic
regularization in India and hopefully the parliament and the legislators act swiftly and with
seriousness in implementing the same.

Page 22 of 24
 ~ Law and Morality ~

BIBLIOGRAPHY

Papers/ Reports

1. Legal Framework: Gambling and Sports Betting Including in Cricket in India, Law
Commission of India, Report No. 276, July 2018, Government of India.
2. Written Statement of John T. Holden J.D./ LL.B. / Ph.D. For the Law Commission of
India on Legalizing of Betting and Gambling, June 28, 2017.
3. Gambling In India: The Journey Ahead, Varun Srinivasan and Amrita Sarkar.
4. Jay Sayta, Legality of Poker and other Games of Skill: A Critical Analysis of India's
Gaming Laws, 5 NUJS L. Rev. 93 (2012).
5. Match Fixing: Threat to Indian Sport’s Integrity, Shayan Dasgupta.
6. Rohani Mahyera, Saving Cricket: A Proposal for the Legalization of Gambling in India to
Regulate Corrupt Betting Practices in Cricket, 26 Emory Int'l L. Rev. 365 (2012).
7. Skill Versus Chance - the Gambling Debate, Tejas R. Kishore Motwani, (2O14) 7 SCC J-
26.
8. The Curious Case of the Indian Gaming Laws: Legal Issues Demysitified, Nishith Desai
Associates, February 2018.

Online Sources

1. A Walk through the Gambling Laws in India - Media, Telecoms, IT, Entertainment -
India.
Website: Mondaq.com
Available at:
http://www.mondaq.com/india/x/617478/Gaming/A+Walk+Through+The+Gambling+La
ws+In+India [Accessed 12 Nov. 2018].
2. GamblingSites.com. (2014). Gambling Laws in India - Regulation and Jurisdictions on
Gambling. [online] Available at: https://www.gamblingsites.com/online-gambling-
jurisdictions/india/ [Accessed 12 Nov. 2018].
3. Pandey, A. (2017). Online Gambling laws in India - iPleaders. [online] iPleaders.
Available at: https://blog.ipleaders.in/online-gambling-laws-india/ [Accessed 12 Nov.
2018].

Page 23 of 24
 ~ Law and Morality ~

4. LIMITED, M. (2018). Is Online Betting or Gambling Legal in India?. [online]

MyAdvo.in. Available at: https://www.myadvo.in/blog/Online-Gambling-Is-India-Game/
[Accessed 12 Nov. 2018].
5. Dalal, P. and Dalal, P. (2016). Online Gaming And Gambling Laws And Regulations In
India | E-Sports And E-Gaming Laws And Regulations In India, Internet Games Laws
And Regulations In India And Online Poker, Rummy, Card Games, Chess, Lotteries In
India. [online] Perry4law.org. Available at:
http://perry4law.org/onlinegamingandgambling/ [Accessed 12 Nov. 2018].
6. Gambling 2018 | Laws and Regulations | India | ICLG. (2018). Gambling 2018 | Laws and
Regulations | India | ICLG. [online] Available at: https://iclg.com/practice-
areas/gambling-laws-and-regulations/india [Accessed 12 Nov. 2018].

Page 24 of 24