Are casinos and online gambling legal in India? A case study

The legality of betting and gambling has been a subject of extensive debate over the course of many years. Although in India playing of cards and rolling of dice has been in existence since time immemorial, yet, one often comes across the debates on gambling on both legal and ethical fronts. While one section seeks to legalize gambling because of the revenue it might generate for the government, the other section has been reluctant to do so owing to issues like corruption and money laundering that might germinate from it.
While the Law Commission of India, in 2018, in its report on Legalizing of Betting and Gambling in Sports recommended for regulating the gambling industry, no substantial progress has been made in this direction. The commission opined that the inability of the state to completely ban the betting and gambling has lead to corruption in sports which could be resolved if the industry is adequately regulated. This would also lead to generation of revenue to the government.

The Law Commission rightly noted that the ban is not absolute and the industry is highly unregulated. This observation stems from the fact that India has legislations relating to regulation of gambling both at central and state level, which adds to the already existing conundrum. Additionally, the legislations in place often pre-date technological advances and therefore fail to address the recent emergence of online gambling.

The legislation in place, the Public Gaming Act of 1867, is a federal legislation which outlaws the operation or being the person in-charge of a public gaming house. It states that it is illegal to operate a public gaming house and also prohibits people from visiting gambling houses. The contravention of this law attracts a fine of Rupees 200 or imprisonment upto 3 months. However, the Act is archaic and does not specifically address the aspect of online gambling. The Act itself predates the recent advancements in technology and fails to address online gambling. Due to this fact, millions of people in India indulge in online gambling on sports and casinos.

Another legislation, the Information Technology Act, 2000 regulates cyber activities in India but does not address legality of gambling or betting. The Act does not specifically address online gaming or gambling thereby making no impact on legal position of online gambling.

Further Entry No.34 of List II of the Constitution of India, 1950 empowers the states to make laws on betting and gambling. Due to this entry, many states in India have their own legislations dealing with gambling and are subject to different interpretations. For example, Bombay Wager Act bans online gambling in the state of Maharashtra and Delhi Public Gambling Act, 1955 bans gambling in the union territory of Delhi but makes an exception for ‘game of skill’. However, the states of Goa and Sikkim are the only states that have legalized gambling with appropriate licensing requirements and at restricted places. The Goa Gambling Act, 1976 allows playing of cards at off-shore vessel. Sikkim is the only state to have a law on online gaming which is the Sikkim Online Gaming (Regulation) Act, 2008. The Act however was later amended to restrict online gaming activities to physical gaming parlours in Sikkim through the internet.

In recent past, we have seen mushrooming of online gambling games such as Rummy, Casino etc. where millions of people rush to test their fate. Since, the law does not adequately address the legality of online gambling, this remains a grey area which requires intervention on part of either legislature or judiciary. While in several Supreme Court decisions Rummy has not been held to be gambling, the clarity is still required when it comes to online casinos.

Rummy has been held to be a game of skill similar to horse racing and is therefore legal in India. However, games like Casinos are a game of chance involving high monetary stakes which amounts to gambling as per Public Gaming Act of 1867. This inference is not difficult to draw as the issue that courts consider while deciding on gambling is whether a particular game is a ‘game of skill’ or a ‘game of chance’. Because of this uncertainty there is no organization that operates the online casino in India. So whether online Casinos are legal in India is the question that has a negative answer. However, indulging in online Casino games would not be considered to be illegal if the site is outside the jurisdiction of India. Due to the fact that the laws of India are not applicable to an overseas organization or gaming site, we continue to see an upsurge in the number of people engaging in this activity. Perhaps, the time is ripe for the Indian legislature and judiciary to end this conundrum and regulate the laws relating to online gambling.