Gambling or betting or satta is not a new term in context to India. But this has been restricted also as considered a sin or a vice among Indian culture and tradition where people have been ruined and destroyed because of gambling. Today gambling in India is restricted to lotteries and horse racing as well as casinos in parts of western and eastern India. Also online gambling is easily available to players making nothing illegal in the present day of internet technology.
So the most important question that comes to mind for every Indian is whether gambling is legal in India and how it all started.
History of Gambling in India
Who doesn’t remember innumerable stories from history where kings lost their kingdoms, queens and wealth to gambling. The battle of Mahabharata was fought over gambling. Also India came under the British East Indian company due to such a vice as shown in history that Nawabs of Avadh were busy playing chess and the soldiers entered into the kingdom easily.
So gambling has existed in India for longer than history accounts. It is written about in the Ramayana which some Indians believe dates back the 7300’s BC, though this epic was first externally referenced in 430 BC. In the Ramayana both gambling boards, believed by some to be the game of chess, and gambling with dice are described.
You can find instances of gambling in Mahabharata dating to 3200 BC, though some historians say it was likely written as late as 120 BC, or could have been 800 BC. In this story Shakuni and Duryodhana arranged a dice game against the five Pandavas elder being Yudhishtira and cheated him out his wealth and kingdom. After losing all his wealth and then his kingdom, he eventually gambled his brothers, himself, and finally his wife into servitude. Later in a dispute where Duryodhana insisted there was no place for two crown prince another dice game was ordered. Not much for luck, the Pandavas were required to go into exile for 12 years, and then remain hidden. Though finally the huge battle took place which obviously was won by Pandavas in the end leading to the destruction of the Kaurvas.
Early gambling devices were fruits, nuts, dices and animals
According to Buddhist text, Indians gambled with nuts of the vibhitaka tree as dice was described as early as 300 BC. Eventually the dice were replaced by astragali where the game Passa came about. In addition to dice Indians grew found of gambling on animals. Initially with ram fights, then cock fights, but in time progressed to enjoying the much more civil horse racing. Historical accounts show that Indians were known to gamble without concern that tomorrow might come, even though this was warned against and prohibited in Hindu hymns and scripts. An interesting fact is that whilst Europeans are generally given credit for the development of certain games, most the earlier version of playing cards and gambling devices discovered in Europe contained Indian symbols. Indians had as much of a roll as anyone creating and helping gambling boom.
The early kings legalized gambling in India
It was in the 15th century that gambling houses were legalized with the King entitled to a chunk of the profits made in these houses. Most of the Indian casino games today were invented during this century. Later in the 18th century, Europeans set foot in India and brought the game of Cricket along with them. Sports betting would become the next best thing as Indians used to bet thousands of rupees on the team they thought would win.
With cricket becoming popular in India, the betting was at an all time high till the late 18th century. It was 1867 when the British took over and gambling houses were outlawed by them, with only a few exceptions. Lotteries, horse racing and rummy were all deemed illegal. But the passion and love for gambling never died. Games became more and more user centric, played in residential streets, small towns and houses with little or large sums of money at stake.
The Public Gambling Act of 1867
The Public Gambling Act of 1867 was passed by the British, over 150 years back, prohibiting gambling. However, this Act is still prevalent in India. Even the penalty is not revised, it is approximately 200 rupees or three months of imprisonment or both. This Act has been amended over time, however, it is still very vague and unclear.
Section 12 of the acts read as-
“12. Act not to apply to certain games. Nothing in the foregoing provisions of this Act contained shall be held to apply to any game of mere skill wherever played”.
Cricket being a game depending upon the skill is not covered within this definition also the game of Poker though it is a game of skill. This definition has been very vague. In 1996, Supreme Court of India clarified the definition and stated that
“The competitions where success depends on a substantial degree of skill are not “gambling” and despite there being an element of a chance if a game is preponderantly a game of skill it would nevertheless be a game of “mere skill”. However, even after this definition, it was not clear what games are not included within the ambit of “mere skill.”
Poker is one of the games which lies in the grey area. Indian government has banned the games like teen patti (flush) however, on the other hand, playing rummy is not punishable.
In 1968, the Indian judiciary declared rummy to be a skilled game. The Court ruled that to expertise rummy one has to memorize the fall of the cards, thus it could not be said that it is entirely based on luck or chance.
The state legislation and gambling
As per Indian Constitution gambling comes within State subject, however, the aforementioned central Act is applicable in all the States which do not have any specific gambling laws.
Seventh Schedule Entry 34 List II of the Indian constitution gives the power to State government to decide the laws regarding gambling. It can prohibit or permit gambling in their state. Due to this liberal law various state have a different policy regarding various gambling games. Moreover, there are different approaches for different kind of games.
Laws in Nagaland
Nagaland has recently accepted and passed the Nagaland Prohibition of Gambling and Promotion and Regulation of Online Games of Skill Bill, 2015 which prohibits any form of gambling in the state. However, even this bill lives a scope of “Games of Skill”. But to bet on these games online, the organization needs to take a license from the State Government. If anyone is found conducting illegal business, i.e. bidding without any license, the person would be liable for a fine of Rs. 20 lakhs which would be followed by an imprisonment of 6 months if not remedied further.
Laws in Maharashtra
In Maharashtra, gambling is prohibited by the State government. Bombay Prevention of Gambling Act, 1887 was passed by the government to regulate gambling practices in the state. However, section 13 of the act leaves a scope of games of mere skill. Section 3 of the Act leaves the scope of a horse race and dog races however race course needs to get a license from the state government.
Laws in Goa
In Goa gambling is permissible. Section 13A of the Goa, Daman and Diu Public Gambling Act, 1976 permits gambling in Goa, Daman and Diu, however hotels need permission from the state and they also have to pay a recurring and non-recurring fees for the same. The Act prohibits common gaming house in Goa, Daman and Diu. The person who opens a common gaming house can be imprisoned up to 3 years and can be liable for a fine of 5,000 rupees. The similar punishment extends to the individual who is found gaming in common gaming house.
Laws in Sikkim
Sikkim has liberal laws compared to Maharashtra. the Sikkim Regulation of Gambling (Amendment) Act, 2005, permits the state to give license to an individual who is interested in operating gambling and to authorize some gambling house. The State has through Sikkim On-line Gaming (Regulation) Rules, 2009, made games like Roulette, Black Jack, Pontoon, Punto Banco, Bingo, Casino Brag, Poker, Poker Dice, Baccarat, Chemin-de-for, Backgammon, Keno, and Super Pan 9 legal. These games can be legally played online however, the operator needs to get a license from the State government. The rules also specify that the games have to be safe, secure and fair.
Online Gambling Regulations
Indian law clearly prohibits gambling in an online platform. It is regulated by Information Technology Act of 2000. The Intermediary Guidelines (Rules) 2011, published under this Act regulates gambling practices by intermediaries, which includes telecom service providers, network service providers, internet service providers, web-hosting service providers, search engines, online payment sites, online-auction sites, online-market places and cyber cafes. Section 3(2)(b) of the said Rules, prohibits any practice which is related to or which encourages laundering and gambling.
The Public Gambling Act of 1867 does not talk about online gambling.
Many online websites like Bet365 and Dafabet which are hosted in international jurisdictions allow deposit in Indian currencies. As these websites have their offices in foreign countries like the UK, they are not governed by Indian laws relating to online gambling. However, there is still a risk of illegal money transaction.
The Payment and Settlement Act, 2007 permits Reserve Bank of India to regulate all online and electronic mode of transaction. They have the authority to make rules and regulations regarding all the payment procedure.
Along with the above-stated act, Foreign Exchange Management Act (FEMA) 1999 regulates transactions. However, it regulates international transactions as well. Thus, if an individual is trying to make an international transaction, other than in Indian currency, it needs to comply with FEMA regulations. Thus, online gambling even though is not expressly prohibited is regulated by various authorities.
The Information Technology Act 2000 regulates cyber activities in India and prohibits publication or transmission of information that can corrupt people. This includes online gambling and the punishment for such activities is much more serious than for offline gambling operations – the fine is Rs. 100,000 or imprisonment up to 5 years. Further, online gambling is a banned offense in the state of Maharashtra under the “Bombay Wager Act”.
The casinos in India
Only three states allow casinos but also now Mumbai have casinos in India,. The other three are Goa , Daman and Sikkim. There are two casinos in Sikkim called Casino Sikkim and Casino Mahjong and 10 in Goa, of which six are land based and four are floating casinos that operate on the Mandovi River. The floating casinos in Goa are Casino Deltin Royale, Casino Deltin Jaqk, Casino Pride and Casino Pride 2. While the first two are controlled by the Deltin Group, the latter two are managed by the Pride Group. According to the Goa, Daman and Diu Public Gambling Act, 1976 casinos can be set up only at five star hotels or offshore vessels with the prior permission of the government. This has led the Deltin Group to open the first land based Casino in Daman which is open now. News reports also suggest that Visakhapatnam is also being looked on as the next casino destination.
Online gambling is in its infancy in India, but Sikkim planned to offer three online gambling licences in 2010. This failed despite India being the most sought out country for online gambling. Sikkim also permits an online lottery, which takes bets from players throughout India. It was expected that other states would follow Sikkim, thereby opening up a major online gambling market throughout India.
In today’s scenario betting or gambling is illegal in most of India. But with internet boom there is no law that makes online betting an illegal activity. Offshore betting companies offer Indians to bet on pretty much everything. The Indian Premier League (IPL) tops among this lists now and some websites have even hooked up with offshore betting agencies, thereby allowing Indians to place online bets.
The state of Sikkim offers online horse betting and lotteries. Lately poker sports league was launched in India. So slowly even offshore casino giants are looking to make a stand in India. It is only a matter of time before online licenses are given out to betting firms offshore to fully allow online betting and gambling in India and certainly laws will change.
Horse racing has long been a popular sport in India. There are several racecourses throughout the region, and race meetings regularly attract large audiences. Bookmakers offer their services legally at these racecourses, along with the tote operators who provide pool betting. Horse racing betting is also legal off course, and betting parlors exist in many parts of the country.
Betting on horse racing has been legalized at state level, which is in stark contrast to the overall stance on gambling. Perhaps this is because horse racing wouldn’t really have the same appeal were there to be no betting involved, but this is still a great example of the contradictory gambling laws in India.
Lotteries In India
Another form of gambling which isn’t so strictly prohibited in India is lotteries. This makes even less sense really, because lotteries are the ultimate games of chance with absolutely no skill involved. Nonetheless, the Lotteries (Regulation) Act of 1998 was passed to govern the operation of lotteries. Although the act was passed at federal level, it basically gives the state governments the right to authorize lotteries within their jurisdictions. The act specified that a maximum of one draw per week was to be allowed, but this isn’t something that appears to be enforced too rigidly.
How does Indian Online Gambling Laws affect you
From the all above facts, the legal situation relating to using online gambling sites in India is still unclear. Many of the major gambling sites welcome Indian players, but because these sites are operated overseas they aren’t necessarily governed by Indian law. As such this does not, by itself, mean that using a gambling site from within India is legal.
With that being said, with the exception of in Maharashtra, there are no laws which clearly state it is illegal for an Indian resident to gamble online. There have been no such cases of any Indian being prosecuted or charged for the offence of using a gambling site. You just need to make sure you use a online site that’s reputable and trustworthy, and that accepts Indian players.
But note that as said above the Foreign Exchange Management Act (FEMA) 1999 was introduced to India in 1999 to govern the exchange of foreign currencies. Technically, depositing to online gambling site in a currency other than rupees could be considered an exchange of foreign currencies, and thus be covered by the act.
This is why many Indians find it difficult to deposit at sites from their bank or by using a credit card. A popular solution to this problem is to use an e-wallet such as Neteller or Skrill.
Though India has a strict policy regarding gambling, however, these policies can be circumvented due to unclear laws. There are many gray holes in the legislation which permits an individual to gamble. Though gambling is permissible in horse racing, lottery, and rummy there has been cases of bidding and match fixing in cricket matches as a game of mere skills, and online gambling is legal as far as the website offering casino games, sports betting and other game of play is not under the jurisdiction of India.