Betting in India: Why Legalisation is called-for
Evelyn Jeniffer Ilakiya S., Nyayshastram
Wagering of money in essence means to bet or gamble.
“Gambling refers to betting or wagering. Results in either a gain or total loss of wager, the money or asset up.”[i].
The two terms gambling and betting are used synonymously although there are slight differences between them. Gambling is a general term, used for gaming that involves stakes, it includes high risk, uncertainty, and can get addictive. It is considered illegal and prohibited in many places. Betting, on the other hand, considered as a legal activity is one of the forms of gambling, where two parties agree to predict a certain result based on the prevailing circumstances.
Gambling is gaming practiced across the world. Due to its prevalence and popularity through various forms in many countries, it is considered an international commercial activity. It constitutes a separate market industry and contributes largely to the global economy. With Las Vegas and Macau being the most populist destinations for gambling, the global gambling market is valued at around 443.2 billion US dollars.[ii]
With technology and digitalization reaching their highest, internet gambling became the new commercial sensation. India welcomed cyber casino sites over the last decade and it's no less than a hub of its own now. However, it has to be noted that Gambling in India has been rampant since time immemorial. Hindu mythology suggests that it is an immoral activity. This has further influenced the law-making policy, employing which the State intends to penalize such activity even today.
Is betting legal?
Section 29 and 30 of the Indian Contract Act 1872, explicitly prohibits wagering agreements. The essentials of such an agreement are the existence of an uncertain event, probability of winning and losing, absence of interest other than the stake, and control over the event.[iii] Moreover, the concept of gambling is against public policy and morality that makes them void in the first place.
The statutory framework governing betting in India is Public Gambling Act, 1867(PGA). It is a pre-independent act introduced in the British era. It forbids gaming and gambling.
Punishment on the instance of such activity is imprisonment and a maximum fine of up to Rs 500.[iv]
In Entry 34, List II of the 7th schedule of the Indian Constitution it is implied that betting and gambling is a State subject.[v] .As a result, every state has enacted distinct legislation to regulate betting and gambling activities within their territory. These ancient gambling legislations refer to gambling activities that take place physically in common gaming houses. Thus, has no provisions prohibiting online gambling. These state legislations include the Assam Gaming and Betting Act, 1970, Bombay Prevention of Gambling Act, 1887, Goa, Daman and Diu, and The West Bengal Gambling and Prize Competitions Act, 1957. Likewise, the states of Karnataka, Kerala, Tamilnadu, Andhra Pradesh, Uttar Pradesh, Rajasthan, Punjab, Orissa, and Meghalaya have their gambling acts and rules prescribing legislations. Additionally, online gambling has been permitted and regulated in the states of Sikkim and Nagaland. The variance in gambling laws across the nation in the light of the legal scenario presented helps in understanding the ambiguity that exists in the lawfulness and operation of the gambling industry.
Gaming and Gambling
Betting in India is a widespread activity. It almost exists in every nook and corner of the country. In rural areas, people bet over winning in kite races to events like cockfight and bullfight also popularly known as Jallikattu. On the other hand, people residing in Urban, metropolitan cities practice, betting in the form of car and bike racing, lottery, poker games, and horse racing. Gambling houses do exist illegally in certain places too. The most popular form of gambling however exists in the area of the sports industry, where people go crazy in predicting who wins a match of cricket, football, or kabaddi. Now the trend has however shifted to online gambling where the internet has made it much more accessible, easier, and flexible. As its IPL season now, online gaming sites are in full swing. They invite players for betting and entice them by offering bonuses. 10Cric, Leovegas, Betway, Comeon, Melbet are a few of the most popular gaming and casino sites. Since gambling Legislation was introduced before digitalization in India, there are no laws explicitly prohibiting online betting. These laws advantage virtual gambling enthusiasts.
Gambling of all games is not prohibited. Certain games are considered legal while others are illegal. This depends on whether the game is construed as a game of chance or skill. Section twelve of the Public Gambling Act prohibits betting on a game of chance and permits betting on a game of skill.[vi] The judiciary has further interpreted this dichotomy in the following cases. The Supreme Court of India in Dr. K.R. Lakshamanan v. State of T. N [vii] held that gaming that relies predominantly on the skill, in spite of there being some element of chance, will be considered as a game of skill. In Varun Gumber v. UT of Chandigarh & Ors [viii] the High court of Punjab and Haryana relied on the SC’S ruling in K.R Lakshamana’s case and held that playing fantasy sports, (Dream 11 in the present case) required the same level of skill, judgment and discretion hence falls within a game of skill and does not amount to gambling. In the case of State of Andhra Pradesh v. K. Satyanarayana & Ors, [ix] the SC held that Rummy was a game of skill and not a game of chance. In Dominance Games Pvt. Ltd. vs State of Gujarat & 2 Ors. [x] Court has held that poker falls within the ambit of a game of chance and contradicted the existing precedents by ruling out that any game, that employs skill but involves money will amount to gambling.
The debate of whether or not betting should be legalised in India has been longstanding. The Indian Premier League match-fixing and betting scandal of 2013 holds a huge place in the history of Indian betting. Three cricketers including officials of BCCI were suspended in the issue. The RM Lodha committee was appointed to investigate the issue, later Chennai super kings and Rajasthan Royals were suspended for 2 years from playing.[xi] . IPL betting came as shock to cricket fans. Cricket is not only a source of entertainment; people invest their feelings and efforts in supporting their favourite teams and players. Hence, they expect it to be played fairly and didn’t want to hear any more betting instances in the future. That’s when the committee came up with a solution and suggested legalizing betting in cricket as a solution, it also opened a 30-day window to gather the views of citizens on betting and gambling.[xii]. The Law Commission of India in its 276th report: Legal Framework: Gambling and Sports Betting Including in Cricket in India, stated that "Incapability to enforce a complete ban has resulted in a rampant increase in illegal gambling, resulting in a boom in black-money generation and circulation.[xiii]. Since it is not possible to prevent these activities completely, effectively regulating them remains the only viable option and regulation would require a three-pronged strategy, which includes reforming the existing gambling (lottery, horse racing) market, regulating illegal gambling, and introducing stringent and overarching regulations”.[xiv]Countries like United States, United Kingdom, Australia, Singapore, and Canada have legalised betting. Belgium has regulated gambling through stringent legislation, meant to oversee and regulate gambling activities. All the states that have legalised gambling have achieved desired results. Opening up of sports gambling markets has aided in a new revenue system boosting government taxation and creates enormous employment opportunities, further black money and money laundering is curbed and aids in achieving economic efficiency.
Gambling and gaming are a huge part of Indian society and continues to be practiced in various parts of the nation despite being an illegal activity. Stringent laws and penalties have also failed to address the issue. In the present circumstance, gambling takes place in the so-called underground world. Where huge amounts are transacted in the black markets that are unregulated by any law, gaming rules, or regulations. These unaccounted transactions never come into the light and are therefore not reflected in the GDP. Regulation of the gambling industry is perhaps the only possible way the illegal gambling business can be devastated. Considering the fact that it’s almost impossible to curtail the practice of gambling and destroying its roots in the country. What can rather be done as suggested by experts in the legal and sports regime is that gambling should be legalised in the sports industry and be subject to regulations. New legislation should be enacted, repealing the outdated laws that exist.
[i] Black’s law dictionary [ii] Global Gambling Markets 2020-2027, CISION PR Newswire (06/08/2020), available at https://markets.businessinsider.com/news/stocks/global-gambling-industry-1029478390# last seen on 15/10/2020 [iii] Carlil v Carbolic smoke ball co (1893) 1 QB 256 [iv] Section 4-A (b) The Public Gambling Act, 1867 [v] Schedule 7, the Constitution of India. [vi] Section 12, The Public Gambling Act, 1867 [vii] K.R. Lakshmanan v. State of Tamilnadu (1996) 2 SCC 226. [viii] Shri Varun Gumber v. UT of Chandigarh & Ors (2017) CGLJ 382. [ix] State of Andhra Pradesh v. K. Satyanarayana & Ors AIR 1968 SC 825 [x] In Dominance Games Pvt. Ltd. vs State of Gujarat & 2 Ors (2018)1 GLR 801 [xi] Cricketnext Staff, IPL Spot-Fixing Scandal: How It Unfolded, News18 (2014), available at https://www.news18.com/cricketnext/news/ipl-spot-fixing-scandal-how-it-unfolded-667489.html, last seen on 12/10/2020 [xii] 'Legalize gambling, subject it to regulation' The Times of India (2/04/2010) available at https://timesofindia.indiatimes.com/india/Legalize-gambling-subject-it-to-regulation/articleshow/5846512.cms last seen on 15/10/2020 [xiii] 276th Law Commission of India Report, Legal Framework: Gambling and sports Betting Including in Cricket in India, available at http://lawcommissionofindia.nic.in/reports/Report276.pdf last seen on 15/10/2020 [xiv] Ibid