Gambling has existed for a long time. It is a game of betting where money is involved as a bet. The game is based on an uncertain event, where the main aim is to win money or any goods. Online gambling has been in existence since the mid-1990s. Online gambling is the same as gambling. The only difference is that in online gambling the whole gaming process takes place over the internet. Virtual poker, sports betting, etc are different types of examples of online gambling. Both gambling and online gambling are prevalent in India. However, there still lies a lot of confusion regarding the prevalence of online gambling, its effects, legality, etc.
Online gambling, an increasingly popular mode of entertainment, is not a new phenomenon. Interestingly, it has quite a history attached to it. The genesis of the same lies in the rich cultural history of India which dates back to thousands of years. Ancient India reflected certain instances where gambling emerged to be a favourite pastime of people. There have been direct references to the same in the ancient epics like Mahabharata and Ramayana. It can be observed that such gambling activities were quite prevalent in various festivals and gatherings in the form of board gambling, betting and animal fights.
In the early 2000s, online casinos in India rose into prominence. As information technology in India grew leaps and bounds and so did the World Wide Web, Online Gambling platforms saw a huge rise in the demand. Over the last few decades, this online gambling industry gained huge popularity. The burgeoning appeal of Online Gambling had definitely given rise to a very fresh dimension to the nation’s landscape. In India, that constitutes a staggering populace of approximately 1.3 billion individuals, a surprising statistic emerges that reveals that almost 40% of the population that constitutes adults of age 18 and above engage in such gambling activities at least once every year.
Online casinos have become a very sought-after choice for the Indian users who seek to engage in an immersive casino experience. The underlying reason for the same is the manifold advantages that it brings about to its users. Some of the notable advantages would be the convenience it provides to its users, a veritable spectrum of banking options, their sterling reputation, the robust security measures that have been incorporated in such places and the wide array of games accessible to them. Some remarkable initiatives have been taken by certain pioneering online gambling platforms that boast to have embraced cryptocurrency as their primary mode of all their financial transactions, thereby adding their hint of innovation and novelty in their landscape. These online casinos rely themselves on provably fair gambling algorithms that serves as the foundation stone to ensure that utmost fairness and verifiability is maintained at all times and at all levels.
Game of Chance Vs Game of Skill?
The Supreme Court of India on various occasions has distinguished between game of chance and game of skill. The Apex Court in the case of State of Bombay v. R.M.D Chamarbaugwala (1957) held that a game is required to involve a significant amount of skill in order to not get termed as a game of chance. It must predominantly rely on skill and the term “mere skill” should not be interpreted otherwise. This stance was further clarified in the case of K.R. Lakshmanan v State of Tamil Nadu (1996) where the court laid down the preponderance of skill test. This test essentially means that in order to be classified as a game of skill, the success of the player in the game should in essence rely upon the attention, knowledge, experience, training, application power etc of the player. Even if an element of chance exists, it should not dominate the skill of the player in determining the winner in the game.
Rummy, which is regarded as one of the most popular games online, was declared to be a game of skill by the Supreme Court in State of Andhra Pradesh v K. Satyanarayana & Ors (1967). The Court took into consideration the fact that game involved memorizing the cards, holding them and discarding them which involved significant amount of skill at the same time there was an element of chance involved since the distribution of cards are not predetermined, nor based on the skill of any player rather it is based upon sheer luck. However the court distinguished that a mere element of chance cannot take away the entire character of a game of skill if it is predominantly dominated by the skill of the players. An element of chance is present in every game of cards however this cannot lead to the conclusion that no skill is involved in the game of rummy.
Various High Courts have also expressed their views on this issue. The Bombay High Court in the case of Gurdeep Singh Sachar v. Union of India (2019), distinguished fantasy sports from gambling. This distinction was made based upon the fact that the results in real life sport matches do not determine the results of winning or losing in fantasy games thus it is not a game based on sheer chance. The High Court of Punjab and Haryana in the case of Shri Varun Gumber v. Union Territory of Chandigarh & Ors (2017) held that fantasy sports involved application of skill in building the team based upon various factors in real life.
The foundation of gambling regulation in India can be traced back to the colonial era. The Public Gambling Act of 1867, enacted by the British, forms the cornerstone of India’s gambling laws. This act primarily addressed physical gambling houses, making them illegal and imposing penalties on both operators and participants. The act, however, did not anticipate the advent of online gambling, leaving a significant grey area in the modern context.
Law and the Online Gambling: A Grey Area?
Online gambling is very popular in India. As the years are passing, online gaming is growing enormously. Some business tycoons have also stated that within 5 to 10 years, this industry will have massive growth and surpass many other online gaming industries. A study shows that in India, almost a huge section of young people, especially those below 45 years of age are involved in online gambling. This section of people consists of almost 75% of India’s population. This will enhance the growth of this industry.
The main attraction of this industry is the winning prize. Online gaming has always been a favorite of youngsters. But when such gaming involves cash or any material goods, more people are interested to play. People in the age group of 30 to 40 years are likely to play this game. A lot of websites are increasing day by day in the field of online gambling starting from casinos to online poker. Even the number of users is increasing day by day. An estimation of India’s online gambling market value is about $60 billion per year. Though 50% of it comes from illegal gambling.
One of the most important factors of online gambling is its prevalence to a huge lot of mass. Previously, for online gaming one has to depend on gaming consoles, desktops, etc. But now with the advancement of technology, online gambling can also be played on our smartphones. And we know that nowadays the availability of android or iPhones etc is very common. Even the way of playing such online gambling has become much easier and thus more and more people are playing it. The year 2020 and the ongoing year 2021 have shown a massive factor in the growth of the online gambling industry. Due to the pandemic, we are all sitting at our homes, and starting from work to education everything is being done over the internet. At this time, online gambling has been a boredom reliever to a lot of people. A huge section of people are now interested in playing it.
Advertisements of online gambling apps have also played a huge role in its growth. We all know how much India loves cricket. Apps like Dream11, Gamezy are being advertised in a huge way on television which is solely based on cricket. This has also influenced a lot of people.
The central legislation governing gambling in India is the Public Gambling Act of 1867. This act, being over 150 years old, does not explicitly address online gambling. As a result, the interpretation of its provisions concerning online activities has been a subject of legal debate. The Public Gambling Act, 1867 defines a “common gaming house” and prohibits the operation of such establishments. The lack of any mention of online platforms has led to differing interpretations. Some legal experts argue that the act implicitly covers online gambling by extending the definition of a “common gaming house” to virtual spaces, while others contend that the act applies strictly to physical premises.
India’s federal structure allows states to formulate their own laws regarding gambling. As a result, the legal status of online gambling varies across states, creating a patchwork of regulations. Sikkim is one of the few states that have proactively regulated online gambling. The Sikkim Online Gaming (Regulation) Act, 2008, allows the state government to issue licenses to operators for conducting online gambling within the state. This act is a significant step towards a regulated online gambling industry in India. Maharashtra follows a more prohibitive approach. The Bombay Wager Act, 1935, along with the Maharashtra Prevention of Gambling Act, 1887, bans all forms of gambling in the state, including online gambling. States like Karnataka, Telangana, and Andhra Pradesh have also taken a prohibitive stance, amending their respective gambling laws to explicitly ban online gambling. Conversely, states like West Bengal have been more lenient, allowing certain forms of online gambling under regulated conditions.
Problem of addiction and consumer issues
The popularity of online gambling has been on the rise since the past one decade. The easy availability and easy access to gambling through online platforms is one of the prime factors contributing to the growing participation of individuals on a global basis. This also brings along with itself other ancillary problems such as vulnerable populations having access to these gambling opportunities which pose additional risks and harm to them. In absence of regulation there is a high possibility that minors, especially those in the adolescence stage, may fall victim to the addiction of gambling. Online gambling platforms provide their users with interactive, immersive environments. In addition to this, the players use digital forms of money in these transactions which leads to them feeling that they are not losing “real money” and they keep indulging more in such activities.
Solutions to the problem
There are certain ways in which this online gambling industry can be extricated:
Each State should make proper laws especially dedicated to the online gambling industry.
The laws should be very expressive and distinct.
It should properly define the terms and indicate the requirements of what is legal and what is not.
The industry of online gambling especially games of skill, has to improve its technology and make it much easier so that it becomes accessible to a lot more users. It has to understand the needs of the customer and design accordingly. As many online gambling apps are banned they have to be designed in such a way that it gets approval of the government. While making such apps, the industry needs to abide by the law and make it accordingly.
We have to also understand that many online gambling activities are banned, yet they are prevalent. Some of them are harmful to people and can cause a lot of monetary loss. More strict laws should be created to prevent illegal gambling. Laws can be also made on the limitation of the amount of money one can use in a day for such activities(if it is legal) so that huge money loss can be prevented.
WAY AHEAD?
The legality of online gambling in India remains a complex and evolving issue. The current legal framework, rooted in colonial-era laws, is inadequate to address the challenges posed by the digital age. While some states have taken steps towards regulation, a comprehensive national framework is essential to provide clarity, protect consumers, and harness the revenue potential of the industry. By learning from global best practices and adapting them to the Indian context, policymakers can develop a balanced and effective regulatory regime for online gambling.
Dr.Krishnan is an Associate Professor in Seedling School of Law and Governance, Jaipur National University, Jaipur
Ms. Rakshita Chaturvedi is a 5th year student of Seedling School of Law and Governance, Jaipur National University, Jaipur
