India: It's Not An Easy Game To Play Under The Gaming Laws

Last Updated: 14 December 2017
Article by S.S. Rana & Co. Advocates

Taking a break from the monotonous schedule is an important requirement for rejuvenation of people. Games serve as a source of entertainment, destressing the individuals from their routine activities. Played in numerous forms, varying from those deploying physical activities to the ones involving strategizing instincts.

The games involving mental faculties to win the challenge have been played since times immemorial. Since the days of the reign of kingdoms, games like chess, pacheesi (a form of ludo), snakes & ladders have always fascinated the royal families. By changed outlook and different variations the games still engross number of people towards them. Not merely restricted to their play on physical media, the games have now expanded their scope on the virtual world as well.

The playing of games for enjoyment purposes is allowed under the legal regime. The situations become tricky when it comes to the playing of games with the involvement of stakes. The law in India remains unclear as to the gaming domain. The major point of consideration which arises is the difference between gaming and gambling. Distinction has been made between games of skill and games of chance.

Gambling / games of chance are a play for value against an uncertain event in the hope of gaining something of value and is entirely dependent on chance/ luck. The games of such nature are allowed to be played once the operator of the game obtains a license for it in the said regard.

Games of Skill are the games that base success upon the existence of skill.

The Legal framework clearly recognizes the games with below elements are not "gambling"1:

  1. where success depends on substantial degree of skill; and
  2. despite there being an element of chance there is requirement of application of skill.

The law in India states a game to be a game of skill, even with the element of chance if it depends upon:2:

  • Superior knowledge;
  • Training;
  • Attention;
  • Experience;
  • Adroitness of the Player;
  • Element of Skill predominates over the element of chance

The Court while deciding on the Public interest litigation3 filed claiming the game 'Kaun Banega Crorepati based on the British show "Who wants to be a Millionaire" held that the game cannot be regarded as gambling. It was discussed that as per the format of the game, the candidate is asked question and given four options out of which he has to pick the correct answer. It was contended that the amount won in the question would serve as a stake for the next question and thus result in gambling. The Court held that skill was involved in answering of question put forth and therefore it was a game of skill and not gambling.

JURISDICTION

Gaming/ gambling being a matter of jurisdiction of State legislations are governed as per State/ local laws. The States have devised their independent laws regulating gaming and gambling activities within their territories. The State law(s) which regularize gambling are as follows:

  1. The north-eastern State of Sikkim by the virtue of Sikkim Casinos (Control and Tax) Act, 2002 and Sikkim Casino Games (Control and Tax) Rules, 2007, regulates the operation of casinos, thus allowing gambling activities on board an offshore vessel.
  2. The western State of Goa under the provisions of the Goa, Daman and Diu Public Gambling Act, 1976, permits gambling activities in five star hotels post obtaining license after complying with the guidelines issued.

The State law(s) which strictly prohibit gambling are:

  1. The northeastern State of Assam by virtue of The Assam Game and Betting Act, 1970.
  2. The eastern State of Odisha: by virtue of The Orissa (Prevention of) Gambling Act, 1955
  3. The central western State of Gujarat vide order dated November 17, 2017, dismissed the petition4 of the club seeking approval of allowing the playing of poker and rummy under the Gujarat Prevention of Gambling Act, 1887.

ONLINE GAMING LAWS IN INDIA

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. While the overall situation for online gaming is favorable in India, 24 out of the 29 States and all the 7 Union Territories permit the playing of online games with stakes. Only a few states expressly prohibit any wagering/ betting activities in toto. The respective state law(s) which prohibit/ regularize the playing of online games are as under.

  1. The northeastern State of Assam by virtue of The Assam Game and Betting Act, 1970.
  2. The eastern State of Odisha: by virtue of The Orissa (Prevention of) Gambling Act, 1955
  3. The Government of the newly constituted southern State of Telangana is in the process of framing a law based on their issued ordinances thereby imposing ban on online betting and gambling.
  4. The north-eastern State of Nagaland regularizes online gaming involving stakes by mandating the requirement of a license (involving license fees) for the same through the Nagaland Prohibition of Gambling and promotion of Online Games of Skill Act, 2016 & Rules, 2016.

CONCLUSION

The law regarding the governance of games remains in the grey area. There persists the requirement to clearly establish the criteria distinguishing the game of skill from a game entirely dependent upon chance. Being governed under the regime of the State Legislation, there remains absence of a uniformed opinion ensuring legality of certain games over others. Mere involvement of stakes is an inefficient mechanism to tag a game as a gambling activity. In the era of growing acceptance and evolution of gaming, there is a requirement of a Central effective legislation throwing light on the activities which may be specifically classified as gambling separating it from those involving preponderance of skill.

Footnotes

1. State of Bombay v. RMD Chamarbaugwala[ A.I.R., 1957 S.C. 699] - held by the Apex Court of India

2. Dr. K.R. Lakshmanan vs State Of Tamil Nadu & Anr [1996 AIR 1153] - held by the Apex Court of India 

3. Bimalendu De And Etc. vs Union Of India (UOI) And Ors. [AIR 2001 Cal 30]

4. Special Criminal Application No. 3900 of 2017

For further information please contact at S.S Rana & Co. email: info@ssrana.in or call at (+91- 11 30562000). Our website can be accessed at www.ssrana.in

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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