Why should you read this?
Its fun playing Teen Patti on Diwali night right? Gathering friends and family, betting money, You may think, “What fun we are having!”
While participating in poker, rummy or betting or even online gambling, have you considered the legal effects of it and how can you get in trouble with this ‘fun’ practice?
In this post, we will see what is considered gambling and how you may be able to protect yourself from any legal action.
You will also know what precautions you should take when you get into virtual gambling or just a fun game of poker at Diwali.
Table of Contents
- Mythology and Gambling
- Game of Skill v/s Game of Chance
- What does the law say about the act of gambling?
- Are there any exceptions to it?
- What is the status of online gambling?
- Is Playing Teen-Patti on Diwali illegal?
- Conclusion
Mythology and Gambling
According to the Hindu folklore, Shiva and Parvati used to play a fun dice game that was accepted by people as a tradition for a very long time. Eventually money became a part of that ‘game’ and turned into the gambling as we know it today.
A study suggests that acts of gambling show similar signs in the brain as to what is produced due to the infusion of drugs by an addict.[1]
In State of Bombay v. R.M.D. Chamarbaugwala,[2] the Hon’ble Supreme Court observed that Right to trade and commerce as provided in Article 19(1)(g) cannot be applicable to activities “which encourage a spirit of reckless propensity for making easy gain by lot or chance”.
In the same judgment the court also cited the example of Mahabharata and how King Yudhister gambled and lost his kingdom and his wife in a dice game against Sukuni.
Indian constitution defines gambling as an activity where there is a conscious risk of winning or losing and outcome is determined by chance or luck.[3]
In simple terms any game which is a ‘game of chance’ and not a ‘game of skill’, where exchange of any movable or immovable property takes place, qualifies as an act of gambling.
Game of Skill v/s Game of Chance
A game of skill is one where the outcome is the result of the mental or physical ability of the players rather than luck. Whereas a game of chance may have some skill element to it, luck or chance usually plays a larger role in shaping its result.
In the case of K.R Lakshmanan v. State of Tamil Nadu,[4] Supreme court stated that
“A game of skill, on the other hand – although the element of chance necessarily cannot be entirely eliminated – is one in which success depends principally upon the superior knowledge, training, attention, experience and adroitness of the player.”
What does the law say about the act of gambling?
The central legislation that governs gambling or gambling like activities is the Public Gambling Act of 1867 which prohibits facilitating or owning a public ‘gambling house’ as well as visiting one and penalizes any such activity.
The term “common gaming house”[5] includes “house, room, tent, enclosure, space, vehicle, vessel or place” where gambling activities are organized for the public, while the owner of the facility gains some kind of profit from such activities.
Most states have recognized this act with some changes while some have enacted state laws on gambling.
Another chief characteristic of this Act is the division between games of mere chance and games of skill. ‘Games of chance’ are illegal under the act and eligible for penalization, while ‘Games of skill’ have been excluded from its scope under Section 12. But, the Act has no provisions or sections relating to online gambling.
Moreover, the State legislation prevails over any Central legislation as per the Seventh Schedule to the Constitution of India meaning States have the power to make laws on gambling and betting.
Punishment under the act
Operating a gambling house, under Section 3 of the Act, within the country is a criminal offence and could lead to a penalty of 200 INR or imprisonment of up to 3 months.
Being found visiting such a gambling house, under Section 4 of the act, on the other hand, could lead up to a penalty of 100 INR or imprisonment of up to 1 month.
Are there any exceptions to it?
States have the power to choose what gambling activities to be allowed and what to be prohibited within their jurisdiction. As per Entry No. 62 of List II of 7th Schedule of Indian Constitution, the States also have the power to tax activities of betting and gambling.
At present, 13 States in India have legalized lottery. These are Kerala, Goa, Maharashtra, Madhya Pradesh, Punjab, West Bengal, Assam, Arunachal Pradesh, Meghalaya, Manipur, Sikkim, Nagaland and Mizoram. Land-based casinos are legal only in two States – Goa and Sikkim, and one Union Territory – Daman.
Goa – Goa, Daman and Diu Public. Gambling Act, 1976, includes operation of offshore casinos, regulating the procedures of equipment testing, labour issues, monitoring of casino customers to prevent money laundering, and restrictions including prohibiting local residents to play, or anyone under the age of 21 years, identity proof, and more.
Sikkim – Sikkim Regulation of Gambling (Amendment) Act 2005, permits both on-shore and land-based gambling. Sikkim Online Gaming Rules of 2009 also permits online gaming and sports betting via Internet parlours with some restrictions on the local residents.
Nagaland – Nagaland Prohibition of Gambling and Promotion and Regulation of Online Games of Skill Act, 2016 (“Nagaland Act”) permits licensed online gaming services and fantasy games.
Maharashtra – Horse betting under Bombay Race Courses Licensing Act, 1912 and lottery under Lotteries Act of 1998, are legal while online gambling is a criminal offence under Bombay Prevention of Gambling Act, 1887.
Andhra Pradesh – The Andhra Pradesh Gaming Act of 1974 prohibits gambling, yet betting on horse races, rummy and lottery are allowed.
Karnataka – Under Karnataka Police Act of 1963, highly restricted horse racing and lotteries are allowed while poker is permitted in recreational clubs, but with a lot of uncertainty.
Telangana – Gambling, games of chance, games of skill and other forms of online betting is illegal as per Telangana Gaming Act of 1974 (amended in 2017).
There are other state provisions, different for each respective state that are being amended from time to time.
What is the status of online gambling?
As per the Public Gambling Act, 1867, any sort of gambling or gambling like activities are illegal in India.
However, when it comes to online gambling via servers that are located offshore, the laws turn vague and lose their power. It is difficult to catch offenders (online gamblers) in such cases because the servers are located offshore where gambling is legal and the Indian law and enforcement departments cannot ask them for their data of users in India
Most of the legislation governing gambling activities are outdated and don’t speak about ‘online gambling’ specifically. Also, Indian legislations have no jurisdiction over gambling websites licensed and operated legally under the laws of other nations.
Only Sikkim and Nagaland have regulations enacted to govern online gaming and gambling within state and off-shore.
New guidelines were issued in April 2011 by the government of India, under the Information Technology Act, 2000 which makes it obligatory for Internet Service Providers (ISPs) to prohibit any unlawful betting and web-based wagering or gambling uniquely those which are being worked from remote nations or off-shore.
Judiciary has stepped into this grey area of virtual gaming for regulation of such activities.
Fantasy sports games and games with similar formats are recognized as games of skill by the high court of Punjab and Haryana[6] and the High court of Bombay[7].
Any virtual gambling platforms provide betting and gambling games, like fantasy betting, poker, rummy, etc.
These platforms provide elaborate sets of guidelines for their use, which are also backed up by the Supreme Court judgements.
MPL (Mobile Premiere League), a well-recognized fantasy gaming platform is legal in India. The platform provides several games for its users, most of which are played with money at stakes. Considering that there is money at stakes, one might think that these games have something to do with gambling.
MPL has well drafted terms of its use in which it is clearly stated that Fantasy sports, rummy, poker, and other games hosted on the platform, are the games of ‘mere skill’ and not chance. These claims are backed up by the judgements of Punjab and Haryana High Court and Bombay High Court, as mentioned above.
“MPL Fantasy games are games of ‘mere skill’ as the result is not dependent on winning or losing of any particular team in the real world, but depends on the performance of each player selected by a user which involves considerable skill, judgement and discretion and further, the success therein depended on one’s superior knowledge of the relevant sport, prudent judgement and attention”
One such Supreme Judgement states that the game of rummy involves a certain amount of skill as well. You are required to memorize the cards and play with strategy.[8]
Similarly, other gaming platforms also provide highly restrictive terms for their use, which players are obligated to go through, especially when there is money involved.
Also, players should keep in mind that residents of such states where even online gambling or gaming is prohibited, are prohibited from participating in MPL games or any other virtual games with stakes.
Is Playing Teen-Patti on Diwali illegal?
In case of Dominance Games Pvt. Ltd. V. State of Gujarat[9], the Gujarat High Court stated that Poker is a ‘game of chance’ and comes under the scope of the Gujarat Prevention of Gambling Act, 1887.
Court also observed that the game of rummy is not within the scope of the act since money or wagering is not an essential component of the game while the game of poker involves betting and wagering.
Betting means putting money or anything of monetary value at stakes over something while wagering basically means an agreement between two parties that a stake will be paid by the loser to the winner.
But a judgement by Punjab and Haryana High Court states as follows:
“There is no dispute to the fact that the incident is in immediate proximity in time to the Diwali festival. Any and every case of playing cards, particularly during festive season, in private property not for the gain and profit of the occupier or owner of property cannot be termed as gambling in a common gaming house, under the Act, to constitute an offence. I am of the opinion, taking in view the facts and circumstances of the case, that it is a case of playing cards during Diwali festivities.”[10]
Accordingly, a friendly game of poker among family or friends during the festive season of Diwali is not illegal and this judgement has been cited in judgements of various High Courts.
Also, as per the Public Gaming Act, 1867 it is punishable under Section 3 of the Act to own or manage or being in a facility called ‘a common gaming house’ as per the definition given in the Act.
A facility shall be termed ‘common gaming house’ only when there is a commission, profit, charge or a fee payable to the owner or keeper of the house for that event.
This definition and standard has been accepted in the Delhi Public Gaming Act,1955. Therefore, any occasional neighbourhood festive card party, as long as that event is not being held for the commercial gain of the owner/manager is legal.
These rules are subject to state restriction, so it should be noted that before playing or organising any such game, you shall have the permission from the police station in your jurisdiction
Conclusion
The regulations on online gambling in India stay potentially blurred.
The judiciary has time and again tried to clarify these regulations through various judgements.
In the virtual world, the realms of online gaming are yet to be examined and tested by the courts in India.
To participate in online gambling, it is important to read all the terms and rules thoroughly.
It is also significant to note that if anyone participates in any gambling activity in India, the person may take comprehensive legal advice in respect of the same to evade any legal implications.
Let us know in the comments, if we missed something or if you have any query.
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- Oberg SA et al., Problem gamblers exhibit reward hypersensitivity in medial frontal cortex during gambling, Neuropsychologia,49(13), 3768‐3775(2011). ↑
- State of bombay v. R.M.D. Chamarbaugwala, AIR 1957 SC 699 (India). ↑
- The Constitution of India, 1949 –Schedule Seven, Entry II, List 34. ↑
- K.R Lakshmanan v. State of Tamil Nadu, (1996) 2 SCC 226 (India). ↑
- The Public Gambling Act, 1867, Section 1 (India). ↑
- Varun Gumber v. Union Territory of Chandigarh, (2017) Cri LJ 3827 (India). ↑
- Gurdeep Singh Sachar v. Union of India, (2004) 3 SLJ 69 CAT (India). ↑
- State of Andhra Pradesh v K.Satyanarayana and Ors., AIR 1968 SC 825 (India). ↑
- Dominance Games Pvt. Ltd. v. State of Gujarat, (20170 SCC Online Guj 1838 (India). ↑
- Kanwardeep Singh vs. Union Territory Chandigarh, (2008) Crl.M.P.No.54959 of 2006(India). ↑
Whoa this is so insightful, never thought there would be so many laws rated to Gambling in our jurisdiction. Commendable work.
Hi, Mehakdeep! Thank you for appreciating our work. We hope that you’d enjoy reading our other posts. It’d be great to hear from you again.