Online Gaming Laws In India

1. Is Gaming Legal In India
2. Cloud Gaming India
3. Gaming Industry In India
4. Gaming Market In India
5. Online Gaming Companies In India

Let me quickly answer the question “Is online gambling in India illegal” and we will go into details about online gambling in India. The answer is it’s a minimal at best low risk ‘grey area’. Nothing you would see any casual bettor getting in trouble for unless fraud was being committed. Despite various laws to try to prohibit it, online gambling is a state wide issue and in India, states such as Sikkim have the power and do allow internet gambling.

Online Gambling in India The Public Gaming Act of 1867 makes no reference to online gambling. This is no surprise, given that the internet was a long way from being invented when it was introduced. In India, the online gaming law is at a very nascent stage and is being administered by the available, if any, local laws. The online gaming involving stakes is neither per se prohibited in India, nor are regarded as gambling activities. The presence of numerous online games including poker bears testimony to this fact. Indian Legal Landscape Of Online Gaming. Gaming sector comprises of 2 significant parts – online skill-based games (casually or socially) and gambling. Gambling activities are simply referred to as Gaming in the eyes of Indian laws. Betting and gambling have been included as subject-matter for legislation under 7th schedule of Indian. There is a law in India that says it is illegal to fund online gambling sites without using Rupees. This law is called the Foreign Exchange Management Act. If you are to place a bet at an online bookmaker or gaming site you need to do so in Rupees. The Information Technology Act 2000 is a central act that governs all online activities in India. The Act does not specifically use the word gambling or betting and hence a number of iGaming providers have entered the market due to the language used in the Act.

As far back as history accounts gambling has existed in India. Whilst there is no way to pinpoint exact dates, the earliest forms of modern dice trace to India, and discoveries of Europe’s early gaming devices have shown they included Indian symbols. It is discussed casually the Ramayana, sets up the great war in the Mahabharata, and is warned against in Rig-Veda X-34-13. The point I’m attempting to illustrate – gambling is as ancient in India as the history of man himself. Despite this fact, the State has gone to great lengths to legally prohibit online gambling in India.

In Recent News

There have recently been issued four (4) letters of intent (LOI) to issue online gambling licenses to entities inside the state of Sikkim. Despite the IT Act which we discuss below we are seeing optimism for the outlooks of online betting in India. Earlier this year Haroon Largat of the ICC (International Cricket Council) pushing for the legalizing of sports betting in our country of India namely because of the match fixing that has occurred. Mr. Largat also believe that be legalizing and regulating the bets, they would be able to more closely monitor illegal bookies whom use the funds to launder for the use of terrorism, drugs, prostitution and overall dis-health of India caused by Cricket Match Fixing.

Information Technology Act/Law for Gambling 2011

This Act was put in place on May of 2011. It was said to be the final curtain to close the doors to online betting in India, which was looking so promising. This was a federal law that said anything taboo or “gambling” was to be blocked at the Internet Provider level. Essentially placing the burden on Internet Service Providers to block thousands to hundreds of thousands of websites, including that of online casinos and betting sites. They forgot one thing, the States have the power. After this law was introduced Sikkim has continued to actively seek out partners for their online gambling licenses. Here is the text of the law from cis-india.org.

Public Gambling Act of 1867

The first laws against gambling in India went into effect on 25 January 1867 in what is known as the Public Gambling Act. This piece of legislation initially applied only to the ten states under British rule, but was amended first in 1897 to include more regions, and since dozens of state ordinances have passed to enforce the law across the nation. Many of these came well after India became a republic in 1950; in fact, to make sure it was clear some states served notice as late as 1976 clarifying the penalties for violating the gambling act.

This important piece of Indian legislation addresses both operators and participants. To catch you up with all modifications, here are some of the items that are covered.

Running a Gambling House is Illegal

This law specifies that the owner, occupier, or anyone having use of the land which gambling occurs can be found in violation; awareness or knowledge of the crime is specifically “not” a requirement for conviction. This was also extended to include suppliers of money to the games as well, basically anyone knowingly loaning someone money for the purpose of them running a gambling house can be found guilty as well.

Visiting a Gambling House is Illegal

This laws states that being found in any place where playing cards, dice, counters, money or other instruments of gaming are found is a crime. It also states that one does “not” need to be found having actually gambled to be convicted.

Police Have Authority to Enter and Search

This law states that police are authorized to enter and search any premise he has reason to believe gambling occurs. This can be done at anytime including use of force if necessary. The police are also given the right to take in to custody all occupants of the house, search the entire premises and to seize possession of all instruments used for gambling.

Guilty Until Proven Innocent

This law states that when a deck of cards, dice, gambling tables, or other gambling instruments are discovered it is assumed they are for the purpose of gambling until such time the contrary is made to appear likely. Even when no play was found, the presence of the instruments alone can be used to convict.

The Laws Are Confusing and Outdated

We’re not going to go as far as other websites do and say gambling is legal in India. However, for the most part the penalties are rather small for the player, a small fine of 100 to 500. For the operator sometimes prison can be involved for each count, so it gets much more serious for them. The area of confusion though is all sorts of new laws have been passed in various states making certain forms of gambling legal. For example in Goa there are legal casinos, most operating on casino boats, in Sikkim there is a large legal lottery Playwin that also operates online. Horse Racing is legal in most Indian states.

Skill Games

Outside the confusion of some forms of gambling are illegal and other are legal, there is the issue of skill versus chance. In 1957 the Supreme Court ruled that competitions that involve mostly skill are business activities as opposed to gambling and are protected under Article 19(1)(g) of the Constitution of India. In 1968 the Supreme Court ruled Rummy was a game of skill. Furthermore in 1996 that same court stated “Golf, chess and even Rummy are considered to be games of skill.” They went on to explain while most games involve both skill and chance, the determining factor is which of the two (skill or chance) predominates over the other.

This is where grey area starts. The game of poker has been ruled skill in some countries and ruled chance in others. Most would assume based on India’s previous rulings, poker competitions are in fact legal in India. However many lawyers and authorities disagree. With no clear ruling on poker specifically by an Indian court it is a grey area many operators have yet to gamble on.

The Lottery

The lottery is a perfect example of how Indian laws are often not enforced. In 1998, the Central Lotteries (Regulation) Act, gave authority of state government to organize lotteries; however, no more than one draw per week was allowed. Upon passing this law soon later terminals popped up across the country where lotteries were drawn every 15 minutes. Despite a violation, this has never been enforced and these lotteries have operated without much fear.

Today, lottery is specifically illegal in 17 Indian states, and legal in the remaining 12. This again hasn’t done much to curve it in the illegal states. Eventually Ranjana Sinha in charge of Maharashtra State Lottery Department, claiming when the law is ignored it is hard to enforce, asked the Central Government to “put an end to this or draft a policy accordingly”. This was never followed up, so what we have is a situation where a law on the books is mostly ignored and unenforced.

As Evident Laws are Confusing

As you can see the law is quite confusing and a lot of grey area exists. What we do know however is games such as roulette, casino war, katti and the likes which are purely based on chance are illegal under Indian law. However, when those games are played on the internet in one’s own home… when might authorities ever get involved?

Operating a Gambling Site in India

Most law experts assume that operating a gambling website is the same as operating a gambling house. The only state we know that specifies this is the case is Maharashtra. The penalties are one month in prison for a first offense, three months in prison for a second offense, and for all subsequent offenses the “minimum” punishment is six months imprisonment. In other states the law is not so clear.

Sikkim Licensed Gambling Sites

There has been a lot of interest in recent months about the state of Sikkim offering gambling licenses which will be valid across India. The idea here is that because the laws of most states focus only on the operators, not the players, if gambling sites could operate legally in one state, they’d attract players from all states. The problems with this theory is that if the laws are supposed to be governed by state, per each state, then the IT ACT wouldn’t be enforced as people from other states would be playing at legal sites in one state, but possibly illegal in theirs.

Playing on European Sites

There are many gambling website legal in the European Union which offer safe and secure regulated games for poker, casino, bingo and sports betting, where you can be certain in times you win, you’ll be paid. Most of these sites can be accessed by anyone with an internet connection.

So the question here becomes, how does India regulate or punish a website which have long histories in the United Kingdom, hold European gambling license, and operate totally legally from where their servers, office and support departments are located.

Royal Panda and Betway even accept rupee deposits and withdrawals, however they are still not “operating in” India. They take the position that they are legal where they themselves operate, laws change often, they can’t be expect to know them all; the burden falls on the client to know laws applicable to them as Betway is not “operating in” India. The fact that they offer rupee deposit and withdrawals is just a matter of convenience to their potential clients.

We’re no gambling law experts, but to our knowledge Indian authorities have shown no signs that the problem of Indians gambling outside India is widespread enough for them to even bother to address the issue. The risks for players certainly appear minor. The police would need to enter your home, find the software installed and all this would be for jail time not exceeding one month or a small Rs. 100 fine. This is our understanding of course, if you’re considering gambling online it will be best to check with your own attorney for advice.

Is Gaming Legal In India

Online Gaming/Gambling laws in India prohibit betting or wagering and any act which is intended to aid or facilitate the same. Gaming/Gambling being a State subject, gaming/gambling in India have laws which differ from state to state . This would mean what is permitted in one State may be an offence in another. The Public Gambling Act, 1867, is the central enactment on the subject, which has been adopted by certain states of India like Uttar Pradesh, Punjab, Madhya Pradesh etc. The other States have enacted their own legislation to regulate gaming / gambling in India activities within its territory. It is to be noted that State Legislations have been enacted prior to the advent of virtual / online gambling in India and therefore references of gaming/gambling in India, in respective state legislatures are in relation to physical premises only, barring Sikkim and Nagaland which are the only States who have introduced regulations pertaining the online gaming.

After going through the State gambling laws for online gambling in India, it is found that, except the State of Orissa and Assam, most of the States have excluded ‘games of skill’ from applicability of its respective gaming/gambling laws. Further, playing certain games including ‘Poker’, both online and offline, is permitted under the laws of West Bengal, Nagaland and Sikkim subject to licence from the appropriate State Authorities. But this would be applicable only in the territorial limits of the respective State. In Goa, gambling is permitted only in Government permitted places operated as casinos.

Cloud Gaming India

The issue of online gambling in India laws in India still remains a grey area which is yet to be adjudicated by Courts of India. Having said that, necessary inferences can be drawn from orders passed by the Court while deciding the issue of whether a particular game is a ‘game of skill’ or a ‘game of chance’. But the issue of whether a ‘game of chance’, if played like a sport without stakes amount to gambling or not? still remains largely undecided.

Game of Skill v. Game of Chance:

Gaming Industry In India

There has been a substantial discussion by Supreme Court and High Court on what constitutes a ‘game of skill’ and a ‘game of chance’. What is adduced from the judgments is that a game where there is preponderance of skill over chance is a ‘game of skill’ and vice-versa.

By taking the above ratio into account, SC in the matter of State of AP v. K.Satyanarayana(1968) held the game of Rummy to be a ‘game of skill’. However, the Court in its judgment has indicated that if there is gambling or if the gambling house is making profit from the game of rummy, then it could amount to an offense under the laws of AP. It was further observed by SC that the three card game which goes under different names such as flush, brag, etc. is a game of pure chance. This was relied upon by SC in another its other judgments viz. M.J.Sivani v. State of Karnataka (1995) and Dr. K.R. Lakshmanan vs State Of Tamil Nadu And Anr (1996).

The issue of whether rummy if played with stakes amounts to gambling or not has not been decided by Supreme Court. However, Andra Pradesh High Court in D. Krishna Kumar And Anr. vs State Of A.P.(2002) (Annexure-2) relying upon the SC decision of 1968 held that till such time the state gambling Act is amended to lay down that playing Rummy with stakes is 'gaming', playing Rummy with stakes is not 'gaming' within the meaning of the Act and is therefore allowed.

Delhi District Court: Gaussian Network Pvt. Ltd. Vs. Monica Lakhanpal

The issue of Online Gaming/gambling laws in India was discussed in detailed in the above case when the issue was put up before the Court under Order 36 Rule(1) of CPC by the parties. The Court held the following:

• Game of skills, if played with stakes does not amount to gambling;
• Playing games of skill for money is only legal in the real form, online games cannot be compared to real games;
• Attracting business or enticing players by alluring them with prize money is illegal;
• Gaming sites partaking a slice on the winning hand are illegal as they amount to a virtual gambling house.

Gaming Market In India

Having said that, the said ruling was rendered infructuous as during the final arguments in the Revision petition, parties sought to withdraw the petition. So the effect being there is no ruling which can be treated as a precedent as regards online gambling.

Gujarat High Court on Poker:

The issue whether Poker is a ‘game of skill’ or a ‘game of chance’ was never discussed in detail by any Court in India until the recent decision/order dated December 4, 2017 passed by Gujrat High Court in Dominance Games Pvt. Ltd. V. State of Gujarat, wherein, the said issue was extensively pondered upon. The Court in its said decision held that Poker is a ‘game of chance’ and therefore amounts to gambling under Gujarat Prevention of Gambling Act, 1887. While arriving at the aforesaid decision, the Court inter alia observed the following:

• That the game of poker originated from ‘flush’ or ‘Indian teenpatti’ which has been observed by SC as a game of chance in its 1968 judgment and consequently, as a corollary, the game of poker is also to be construed as a game of chance;
• The game of poker involves a process wherein the players have no control or say on the cards received by them and the final outcome is based on mere luck or chance depending upon how the cards are received by the player. Poker face to bet, would be a part of bluffing or deception and the so-called strategy, cannot be considered as a skill. The outcome also depends on the ability of a player to spend money and how deep are his pockets. It is a game of deceiving, bluffing and duping other players;
• The game of Rummy is different than Poker. While poker involves betting or wagering, rummy has nothing to do with stakes and betting or wagering is not essential to the game of rummy;
• The Court while noting the ills of gambling and impact of gambling on the moral fibre of society noted that ‘one must not overlook the ground realities in India or the country like India, where the majority of the population is struggling for the basic necessity and there is lack of awareness amongst the people and if they are permitted by betting in the craze of easy money, they do not know what to do if the things go wrong.’

Mr. K.N Suresh, Secretary of Indian Poker Association has filed an appeal against the said order, being Letters Patent Appeal No. 2625 of 2017 before the Division Bench of Gujarat High Court. The bench after hearing the matter briefly on December 28, 2017 issued notice to the state government and other respondents, and till date the matter is not heard finally. Having said that, since no ad-interim/interim reliefs are granted presently, the Single Judge order stands valid and enforceable.

Though the order does not specifically make any observation on Poker, if played as a sport and/or without stakes, however, while differentiating between rummy and poker, the Hon’ble Court at para 60 of the said order makes a presumption that wagering or betting is an inseparable part of the game of poker and therefore would involve stake. The Court while holding Poker to be a ‘game of chance’ has also predominantly relied upon moral religious and social grounds. In the absence of the said order being overruled and the issue being addressed specifically, the game of poker, even if played as a sport and/or without stakes remains a grey area which is then left at the discretion of police authorities.

POSITION:

Online Gaming Companies In India

Though the issue of Poker was considered by Gujarat High Court in view of the provisions of Gujarat Prevention of Gambling Act, 1887, in arriving at the decision of Poker being a ‘game of chance’, the court made several observations like how the game is played, origin of the game, reference to ancient Indian literature, moral and religious grounds, etc. which may be applied by other states/state machinery having similar gambling laws. The issue is likely to be clarified by Division Bench of Gujarat High Court, once the appeal is finally heard.

In view of the above, it is clear that if a game is considered to be a ‘game of chance’ under the state laws and rulings by the Courts and is played with stakes, would constitute gambling under the respective state laws with exception pertaining to a few states as mentioned above. If an entity is able to show that a particular online game or a particular on-ground gaming activity has preponderance of skill over chance and/or is played as a sport without stakes, it may fall within the exception of gaming/gambling under the state gambling laws. It is pertinent to note however that if online gaming is illegal in any State, the promotion of the same in such State would amount to violation of ASCI Code as well as Cable TV Network Regulation Act, 1994.

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