This Article is From Aug 19, 2020

Online Gambling Should Be Made Legal In India

Charles Dickens would have approved of The Public Gambling Act, 1867, the primary legislation that governs gambling and betting in India that was promulgated three years prior to Dickens' death in 1870. His compatriot and namesake, Charles Babbage, who died in 1871, and who is credited with having conceived the first automatic digital computer, would not. The Public Gambling Act seeks to punish "public gambling and the keeping of common gaming houses". The definition of a common gaming house is a Dickensian construct and is defined essentially as a walled enclosure where cards, dice and other "instruments of gaming" are kept for profit or gain. Curiously, the Public Gambling Act has not been amended to classify the internet, the telephone or a mobile phone as a "common gaming house". The internet does not lend itself easily to the definition of a common gaming house, and even if it did, it is unclear whether computers can be considered "instruments of gaming". Wonder what Babbage would think.

The Public Gambling Act applies to all states in India, although individual states have separate laws which also govern gambling in addition to the state-specific amendments that such states have made to the Public Gambling Act. Whilst the Supreme Court and the Delhi High Court have considered whether online rummy and poker fall within the purview of the Gambling Act, a final determination of this issue has not been reached. Meanwhile, Sikkim, Nagaland and Telangana have sought to regulate online gaming as well.

The focus, therefore, has been on a distinction between games of skill and games of chance since the former are not subject to the purview of the Public Gambling Act. The Supreme Court in 1996 reasoned that few games are purely of chance or skill, and a game of chance is one in which the element of chance predominates over the element of skill, and a game of skill is one in which the element of skill predominates over the element of chance. It is the dominant element - 'skill' or 'chance' - which determines the character of the game. The Supreme Court, much to the relief of horse-racing bookies and punters, held that betting on horse-racing was a game of skill.

This distinction between skill and chance is even more difficult to apply to online gambling of the sort that is offered by some overseas betting websites, where a punter can wager a bet on almost anything, including on the number of lengths by which the Cambridge boat will defeat the Oxford boat or whether Sachin Tendulkar will hit a boundary on the last ball of the fourth over that is bowled to him at Lords. Are these determinations based predominantly on skill or chance? Unfortunately, cricket betting and match-fixing have become inextricably linked after the startling revelations by Hansie Cronje in 2000, but there is considerable skill in certain bets that can be placed on cricket matches. The Karnataka High Court has held that poker is a game of skill whilst the Gujarat High Court has held that poker is a game of chance.

The Madras High Court (as it is still known) considered the aspect of online gambling in a judgment that was delivered at the end of last month. The case had nothing to do with online gambling but related, rather amusingly in an account that R. K. Narayan could have written, to a school teacher playing cards with his friends at a farm near a thorny bush in Tirunelveli district. The poor school teacher complained that he was only watching and not playing and that he was only present because his school had been closed by Covid-19. The High Court asked the police how they could enforce the Public Gambling Act to people playing cards near a thorny bush but ignore online rummy and other games "mushrooming" across the country.

The High Court referred to the opprobrium with which gambling is referred to in the Rig Veda, the Mahabharata and Saint Thiruvalluvar and then concluded that, except for a few cases, the issue of online gaming had not been judicially considered. The High Court lamented the lack of a legislative framework to deal with online gambling and hoped that a comprehensive regulatory framework to regulate online gambling would be implemented by the legislature.

A comprehensive regulatory framework would not just generate employment but also revenue from the grant of licences and taxes on winnings. It may perhaps encourage technological advancement in this area and will help eliminate the invidious role played by bookies who place illegal bets on overseas websites often with the intent of match-fixing using laundered funds.

The time to regulate online gambling is definitely here and we should not lose more time in regulating this activity.

(Uday Walia is a partner at Platinum Partners, a law firm.)

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