Why gambling is illegal in India? – A detailed View

Introduction:

We all are familiar with the gambling as it is completely legal in United states of America. But In India gambling was banned during the British rule itself. Also after the independence India did not change the rules regarding Gambling. If you want to explain why gambling is illegal in India in a single line, you can say as “To stop the flow of black money through Hawala racket” and to prevent the money flow from the middle class families into gambling and lose their money. As India have majority of middle class population, Gambling paves the way for them to become rich quickly as well as become even poorer in an instant. It also stops illegal black money movement through underground dealings like Mafia and drug dealing and even to fund terrorism in the name of Gambling. Now, if we want to explain in detail that why gambling is illegal? It is governed by the Indian Gambling Laws. While others speak about what is legal and what is illegal in gambling, one thing we say for sure- Indians love to gamble. It is said by the market size of the Indian Gambling market – which is about Rs.3.5 lakh crore ($60 billion USD) according to a recent news report. A medium percentage is shared legally on horse racing and lottery, a large amount is betted on cricket and other sports through illegal means. We will discuss about Gambling in this article.

 

Public Gambling Act (1867):

Gaming Act of 1867 is the Law that governs gambling in India, which is a central law which prohibits the running of any public gambling house. This is the law behind why casinos and gambling are illegal in the country. India, the gambling is governed by the Public Gambling Act of 1867 where, this 153 year old law makes operating a gambling house, assisting in the operation of a gambling house, visiting a gambling house (even if it is for gambling or not), financing gambling and being in possession of gambling devices a crime. The penalty is a fine of maximum 200 rupees or up to three months in prison. But this is an old law created during British rule. Pakistan has abolished this rule a long back, our own government has affirmed their commitment to keeping it on the books on many occasions.

In 1949, the Constitution of India explicitly gives the respective states the right to legislate and make policies related to “activities involving betting and Gambling”. It is very clear in the Seventh Schedule Entry 34 List II that states could legalize the gambling activities if they choose to do so. Up to date most states have only made laws against gambling, while 13 states have legalized lottery, and 2 states (Sikkim and goa) have legalized many other forms of gambling which gave rights to run casinos and other Gambling Houses. This act clearly mentions that “nothing in this Act shall apply to games of mere skill wherever played” which means, in absence of other laws against them, betting on games of skill is legal.

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Legal Gambling in Goa and Sikkim:

Goa is the first Indian state to legalize gambling in India. It has made two amendments to the Goa, Daman and Diu Public Gambling Act, 1976 to legalize certain forms of gambling. By this act, Government may authorize any game of electronic slot machines in Five Start hotels in its territory and in subject to such conditions including the payment of recurring and non-recurring fees as may be prescribes which are given by 26 Inserted by the Amendment Act 11 of 1992 and 27 Inserted by the Amendment Act 13 of 1996. As of October 2019 there are 7 land based casinos and several offshore casinos that operate legally in Goa.

Sikkim is the second Indian State that legalized gambling. The Sikkim Casino Games rules of 2002 gives the Sikkim Government the authority to grant licenses to business organizations and individual owners interested in operating casinos. The Sikkim state rules in Regulation of Gambling Act (Amendment), 2005 gives the Sikkim Government the authority to authorize gambling by way of giving license for those who are interested in organizing the gambling houses and casinos. Sikkim also became the first Indian State in India to legalize internet gambling by amending the existing gambling rules.

 

Internet online gambling:

This Sikkim state has started taking applications for giving license to online gambling where the servers are operated within the state. This applications also includes sports betting, lottery and casino gambling. But the licensed online betting organizations will not be able to operate virtually because there are no gambling laws that make use of them legally. Online gambling sites such as Betfair and William hill took India as a next major market to expand and operate its gambling in the Indian soils. Also By the Indian Law, foreign investment involving gambling is Completely illegal. Internet gambling is a great global business. United Kingdom based gambling company www.bet365.com have customers all over 200 countries with 4 million registered accounts. This site is available in many of languages and different currencies including Indian Rupee [INR]. Although gambling at their website is technically illegal by the law, but there is no one arrested for gambling in India. But as the bets are placed online and company is located outside the India and no advertising or no servers in the India, authorities cannot stop them from servicing Indian people. This is easy for Indians to use e-wallet and one website can be accessed all over the world.

 

Horse racing, Rummy and lotteries are legal:

Yes, you read it right. Betting in horse racing, lottery and Rummy are legal in many states of India. In 1996, Supreme Court has decided that betting in the games that does not involve skill are termed as “illegal” but the question arises. Where skill in involved in Horse racing? An early ruling came in 1957 where betting in Horse Race was determined by a skill: because the court explains that horse racing is not luck-based game and also that is not illegal according to the Gaming act of 1930 and Police act of 1888. This made Horse racing instantly popular among the Indians. India has total of 9 racecourses managed By Turf Authorities of India which organizes horse racing events and manages bookmakers to manage people bet in horses in their betting booths.

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Rummy was also termed to be a skill game in 1968 as requires certain amount of skill because all the cards has to be memorized and the building the Rummy requires skill in holding, setting and discarding cards. Also in 1988, The central Lotteries regulation act gave the governments of respective states the authority to hold the lotteries by restricting only one draw of lottery per week. Many Lottery terminals are available all over India and One lottery is drawn every fifteen minutes. Play Win Lotto is a online website that allows people to purchase lottery from their website. This is a Sikkim licensed company and rights are given to them by the constitution of India.

Indian premiere League (IPL):

The Indian Premier League (IPL) hooked up with offshore betting agencies, thereby allowing Indians to place online bets. If one has to bet one’s real money in IPL, they should sign up with one of the bookmaker like India bet, bet365, H T bet, Willian Hill and Betfair by opening an account with them. Then go to the cricket section of their website, where they will list all the IPL matches that they can bet on. There they can choose which matches to bet, not only matches, one can bet on possibly every aspect of an IPL match, from the toss to odds on a batsman scoring a hundred. The question of whether it is legal to bet from India using an international bookmaker is not clear in law because the law is clearly outdated and there is no word mentioning “Online” and “internet”. All these agencies accept online betting accounts with Indian address. It even one of the largest betting agencies in the United Kingdom, will accept bets from customers in every state of India.

 

Internet Service Providers (ISPs):

Central Government has no rights to control over England based bookmakers whom operate legally under European law and International Law but not to Indian law, But made another way to make these kind of laws difficult to use. Gazette of India published the Information Technology Rules, 2011 on 14th April. This act instructs the Internet Service Providers and Website Hosts, to block access to certain types of websites that includes betting or gambling content and websites related to Hawala and money laundering to stop investing the money into these kind of websites.

 

Why Corporates are urging to Legalize Gambling In the name of sports Betting:

Despite the Government which is making gambling illegal and making the betting websites very difficult to use, these kind of corporates want to legalize the betting in name of fair means. Even the CEO of International cricket council advices to legalize betting in the cricket Matches to stop underground dealings and on spot match fixing. Also the other corporates make their customers to invest their money in one of their betting and in case of winning their customers bet they will take a part of the amount won as a commission. For an example, we will take a betting situation of tossing a coin. There are fifty people in total and one man in middle of them organizing the bet of tossing a coin. Half of the people will place bet on One side of the coin and remaining of the people will place bet on another side. Now, after tossing the coin, Definitely the coin will show one side. The people who betted on that side will win and another will lose their money. Now the organizing man will collect some percentage of money from the people who won as his commission. Here, as the same situation, the organizer will act as a corporate agent in the real world and the people are the public all over the world. Even if the one side of people win or lose, the corporate agent will definitely earn money as a commission. This is how it works.

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Conclusion:

One cannot stop these kind of activities in an instance. Gambling can be stopped by taking steps gradually and it takes time. But, the main flaw is that, the 153 year old Public Gambling Act of 1867 is quite outdated and needs to be rewritten. But legal gambling is available for rummy, lottery and horse racing. If the people is very need in betting, they can opt for these legal sports and it not advisable to depend in the gambling for the daily living. Because there are no chances of winning always. It is advisable to invest In games that involves skill. Like, The websites like Dream11 and MPL allows a person to invest some amount to play a game online and using their skill, if they win they can earn money. Th good thing is, it is completely legal and does not violate any laws. If Gambling is legalized, then it will be more popular  among the teenagers and young Indians. They can also make them involve in illegal activities in doing gambling. So, the government should regulate the laws according to the current situations and future predictions.

 

 

Author: SriKanth R,
2nd Semester | BBA., LLb., | IFIM LAW SCHOOL, BANGALORE.

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